Bharat Coking Coal IPO opens today:Price band set at ₹21-23, grey market premium climbs to 50%

The Bharat Coking Coal Limited (BCCL) IPO opened for subscription on January 9, marking the first major public issue of the year. BCCL is a subsidiary of Coal India and is engaged in the production of coking coal, a key raw material for the steel industry. In the grey market, BCCL shares are trading at a 50% premium over the issue price, signalling strong investor interest and expectations of a robust listing. Price band, issue structure The IPO is a complete Offer for Sale (OFS), meaning the proceeds will go to promoter Coal India, not to the company. The price band has been fixed at ₹21–23 per share. Investors can apply for a minimum lot of 600 shares, requiring an investment of ₹13,800 at the upper end of the price band. The issue will remain open for subscription until January 13. How to apply Investors with a demat account can apply through platforms such as PhonePe, Google Pay, Paytm, or broker apps like Zerodha and Groww. Search for BCCL IPO, enter the bid details, and complete the application using a UPI ID. IPO allotment is done through a computerised draw. In case of oversubscription, shares are allotted to a limited number of applicants. Key risks to consider Government-owned BCCL makes coking coal used in steel production Bharat Coking Coal Limited (BCCL) is a government-owned company engaged in the production of coking coal, a critical input for the steel industry. Grey market premium at 50%, strong listing expectations According to market experts, BCCL shares are trading at a grey market premium (GMP) of ₹11–12, indicating potential listing gains of around 50% if the trend continues. However, analysts caution that GMP only reflects market sentiment and can change with global market conditions. Post listing, Coal India’s stake in BCCL will decline to 90%. Brokerages see listing gains, advise caution on long-term view Anand Rathi Research has assigned a ‘Subscribe’ rating to the IPO, citing BCCL’s strong market position and its importance to the steel sector. The brokerage expects scope for listing gains but advises caution for long-term investors, as coking coal prices are influenced by global trends. Strong financials, debt-free balance sheet BCCL has delivered stable financial performance. In FY25, the company reported revenue of around ₹13,803 crore and a profit of ₹1,564 crore. A key strength is its debt-free balance sheet and robust cash flows. BCCL accounts for 58% of India’s coking coal production According to FY25 data, BCCL contributes 58.5% of the country’s domestic coking coal output. As of April 1, 2024, the company held coal reserves of around 7,910 million tonnes. Its production primarily caters to the steel and power sectors. Since 2021, BCCL has expanded capacity through increased use of Heavy Earth Moving Machinery (HEMM). The company currently operates 34 mines across a total lease area of 288.31 sq km in the Jharia and Raniganj coalfields. What is coking coal and why is it important? Unlike thermal coal, which is mainly used for electricity generation, coking coal is a key raw material in steel-making furnaces. India imports a large portion of its coking coal requirement, making domestic producers such as BCCL strategically important.