Bharat Coking Coal IPO: Check the GMP, Price Band, Peer...

Synopsis: India’s largest coking coal producer, Bharat Coking Coal Limited, launches a ₹1,071 crore OFS IPO, offering strong market leadership amid near-term earnings pressure and regulatory risks.

A producer of coking coal, non-coking coal, and washed coal is set to make its debut in the primary market through an upcoming IPO that will open for investor subscription next week.

The issue is a complete offer for sale by the promoter. This article presents the insights of research analysts from the Trade Brains Portal, offering a detailed review of the company’s business profile, financial performance, peer comparison, strengths, weaknesses, and key investment considerations.

Key IPO details of BCCL

Bharat Coking Coal Limited is launching its Initial Public Offering (IPO) to raise funds through a book-built offer. The IPO comprises a pure offer for the sale of 46.57 crore equity shares aggregating up to Rs. 1,071.11 crore. There is no fresh issue component in this IPO.

Bharat Coking Coal Limited’s IPO price band is set at Rs. 21 to Rs. 23 per share. The IPO opens for subscription on January 9, 2025, and closes on January 13, 2025. The shares will be listed on NSE and BSE on Friday, January 16, 2025.

GMP of Bharat Coking Coal Limited IPO

As of January 8, 2025, the shares of Bharat Coking Coal Limited in the grey market were trading at a 49.57 percent premium. The shares in the Grey Market traded at Rs. 34.4. This gives it a premium of Rs. 11.4 per share over the cap price of Rs. 23.

Overview of Bharat Coking Coal Limited

Bharat Coking Coal Limited (BCCL) was incorporated in 1972 and is a Miniratna public sector enterprise. It is a wholly owned subsidiary of Coal India Limited. BCCL is India’s largest producer of coking coal and contributed about 58.5 percent of the country’s total coking coal output in Fiscal 2025. Coking coal, which is mainly used in steel manufacturing, is the company’s main product. As of April 1, 2024, BCCL had estimated coal reserves of around 7,910 million tonnes.

The company’s mining operations are mainly located in the Jharia coalfield in Jharkhand and the Raniganj coalfield in West Bengal. Its coal production increased from 30.51 million tonnes in FY22 to 40.50 million tonnes in FY25, showing steady operational growth.

Bharat Coking Coal Limited (BCCL) operates 34 mines and is involved in mining, coal washing, revival of old mines, and solar power generation. It supplies coal to power, steel, and fertilizer industries across India.

Promoters Holdings of Bharat Coking Coal Limited

The promoter of Bharat Coking Coal Limited is Coal India Limited, which is selling 46.57 crore equity shares through the IPO. Before the issue, Coal India Limited held 100 percent ownership in the company. After the IPO, the promoter’s stake will reduce to 90 percent, while 10 percent of the shares will be held by public investors.

Lead Managers of Bharat Coking Coal Limited IPO

The book-running lead managers of the Bharat Coking Coal Limited IPO are IDBI Capital Markets & Securities Limited and ICICI Securities Limited. KFin Technologies Limited acts as the registrar for the offer.

Objectives of the Offer

Bharat Coking Coal Limited IPO proceeds will go directly to the selling shareholders, Coal India Limited. The company will not receive any funds from the offer.

Financial Analysis of Bharat Coking Coal Limited

Coming into financial highlights, Bharat Coking Coal Limited’s revenue from operations has decreased from Rs. 13,161.10 crore in FY24 to Rs. 13,083.26 crore in FY25, which represents a drop of 0.59 percent. The net profit has also decreased by 20.73 percent from Rs. 1,564.46 crore in FY24 to Rs. 1,240.19 crore in FY25.

In the six-months of FY25, Bharat Coking Coal Limited has reported a revenue from operations of Rs. 5,260.29 crore and a net profit of Rs. 123.88 crore. Bharat Coking Coal Limited has a PAT Margin of 8.61 percent and an EBITDA Margin of 16.36 percent.

In terms of return ratios, the company’s ROCE and RoNW stand at 30.13 percent and 20.83 percent, respectively. Bharat Coking Coal Limited has an earnings per share (EPS) of Rs. 2.66.

Bharat Coking Coal Limited Vs Peers

Bharat Coking Coal Limited reported revenue from operations of Rs. 13,802.55 crore with a strong Return on Net Worth (RoNW) of 20.83 percent. The company reported an EPS of Rs. 2.66, while its net asset value (NAV) per equity share stood at Rs. 14.07.

In comparison, Alpha Metallurgical Resources Inc recorded significantly higher revenue of Rs. 25,320.27 crore, with a RoNW of 11.48 percent and an EPS of Rs. 1,233.78. Warrior Met Coal Inc posted revenue of Rs. 13,058.93 crore, delivering a RoNW of 12.82 percent and an EPS of Rs. 410.12.

On the balance sheet side, Alpha Metallurgical Resources reported a NAV per share of Rs. 11,182.10, while Warrior Met Coal recorded a NAV of Rs. 3,423.71 per share, compared with Rs. 14.07 for Bharat Coking Coal Limited.

Strengths of Bharat Coking Coal Limited:

Largest coking coal producer in India with access to large reserves
Strategically located mines with large washeries
Well-positioned to capitalize on demand for coking coal in India
Strong parentage of Coal India Limited
Consistent track record of growth and financial performance
Experienced management team supported by a committed employee base

Weaknesses of Bharat Coking Coal Limited:

Dependent upon the pricing and continued supply of raw materials
It largely depends on its top 10 customers, which accounted for 83.89% and 88.88% in H1 FY26 and FY25, respectively.
Manpower intensive
Operations are sensitive to seasonal changes
Reduced demand due to the emergence of renewable energy

Opportunities:

Increased Power Demand Due to Economic Expansion
Rise in Per Capita Electricity Consumption
Growth in Manufacturing Segment
Infrastructure Development

Threats:

Mining Industry’s Share in GVA Declining
Challenges in Approvals and Processes for Coal Mines
Land Acquisition Issues
Logistics Constraints in Coal Transportation

Conclusion:

Bharat Coking Coal Limited’s IPO offers investors exposure to India’s largest coking coal producer and a strategically important PSU supporting the steel and power sectors. The company’s dominant market share, large reserve base, and steady growth in coal production provide long-term business visibility.

However, recent pressure on revenues and profitability highlights sensitivity to coal demand, pricing, and regulatory factors. Investors should carefully assess BCCL’s financial trends, industry outlook, and associated risks before considering participation in the IPO.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post Bharat Coking Coal IPO: Check the GMP, Price Band, Peer Comparison and More appeared first on Trade Brains.