Bharat Coking Coal IPO To Reflect 'Real Value' In Market, OFS Proceeds Directed To Capex

The much-awaited initial public offering (IPO) of Bharat Coking Coal Ltd., will open for subscription on Jan. 9, and will close on Jan. 13, 2025. The Rs 1,300-crore issue will be entirely an offer for sale (OFS), under which promoter Coal India Ltd. will sell up to 46.57 crore equity shares. Bharat Coking Coal's IPO marks the first mainboard issue of 2026.

The subsidiary of the world's largest state-owned coal producer has set a price band of Rs 21 to Rs 23 per equity share for the IPO. In an exclusive interview with NDTV Profit, Mukesh Agrawal - Director of Finance, Coal India Ltd. said that Bharat Coking Coal IPO will reflect its 'real value' in Coal India.

According to Agrawal, Coal India has eight subsidiaries but Bharat Coking Coal is different from the other subsidiaries as it is coking coal. The others are non-coking coal. ''The subsidiary's value was not reflecting in the real value of Coal India. So, Coal India has decided to bring the OFS of 10%.''

''We had got the mandate for 25%. Hence, 10% we are offloading, so that the 'real value' of coking coal will be reflected in the market and people can realise the true value,'' said Agrawal while explaining the IPO's objective.

''Coal India has a huge capex plan for the next five years in different areas. Bharat Coking Coal IPO proceeds will be utilised for Coal India's capex,'' he said. BCCL's projected profit is over Rs 2,000-2,500 crore every year and depreciation is nearly Rs 400 crore. ''Capex requirement is only Rs 1,000 crore per year. Hence, it has sufficient funds to meet the capex requirement and serve the dividend of their stakeholders,'' he added.

Discussing the production, Manoj Kumar Agarwal, Chairman & MD, Bharat Coking Coal Ltd, said, ''Currently we are producing 40-40.5 million ton per year. In the coming years, it will go upto 54 million tonnes. We are India's prime producer of coking coal accounting for 58.5% of total production.''

Bharat Coking Coal IPO includes a reservation of up to 2.32 crore shares for eligible employees and up to 4.66 crore shares for the Coal India shareholders. The remaining net offer will be allocated among the qualified institutional buyers, non-institutional investors, and retail individual investors.

The Book Running Lead Managers to the IPO are IDBI Capital Markets and Securities and ICICI Securities Ltd, while KFin Technologies Ltd is acting as the registrar. The anchor investor portion will open for bidding on Jan. 8.

Incorporated in 1972, BCCL is India’s largest producer of coking coal, operating mainly in the Jharia coalfields (Jharkhand) and Raniganj coalfields (West Bengal). It was granted Mini Ratna status in 2014 and supplies raw and washed coal to steel, power, and cement industries.

BCCL posted a net profit of Rs 1,240 crore for the financial year ended March 31, 2025, compared to Rs 1,564 crore in FY24 and Rs 665 crore in FY23. For the first half of FY26, net profit stood at Rs 124 crore, lower than Rs 749 crore reported in the corresponding period of the previous year.

The company’s revenue from operations in FY25 was Rs 13,803 crore, against Rs 14,246 crore in FY24 and Rs 12,624 crore in FY23. For the first half of FY26, revenue stood at Rs 5,659 crore, compared to Rs 6,846 crore in the corresponding period last fiscal. It has maintained a compound annual growth rate of 5.80% in coking coal production from FY23 to FY25.