Investors poured into Bharat Coking Coal's initial public offering, bidding almost 147 times the shares on offer and drawing close to 90 lakh applications.
Record‑breaking subscription
The Rs 1,071‑crore issue was subscribed about 147 times overall. Breakdown of demand:
- Qualified institutional buyers (QIBs): 311×
- Non‑institutional investors (NII): 258×
- Retail investors: 49×
- Employees: 5×
- Shareholder quota: 87×
Nearly 90 lakh individual applications were recorded, a rare level of participation for a public‑sector undertaking.
Why investors flocked
Bharat Coking Coal is India's largest producer of coking coal, the key raw material for steelmaking. With about 7.9 billion tonnes of reserves – roughly one‑fifth of the country’s total – the company enjoys a monopoly‑like position that offers predictable demand.
Valuation comfort amid market volatility
The IPO priced shares at Rs 23, valuing the firm at around Rs 10,711 crore, or roughly 6.4 times enterprise value to EBITDA. Analysts view this as a fair multiple given the long‑term reserve base and steady cash flow.
Anchor investors set the tone
The anchor book, worth Rs 273 crore, was fully subscribed before the public issue opened, signalling confidence from large institutional players and encouraging broader participation.
Growth beyond coal extraction
The company is expanding its coal‑beneficiation capacity. Existing washeries handle 13.65 million tonnes per year, and three new units adding 7 million tonnes are under construction. Once complete, total capacity will reach about 20.65 million tonnes, improving product quality and margins.
Financial performance and near‑term risks
Revenue grew modestly (4.6% CAGR) while EBITDA surged 88% and profit after tax rose 36% between FY23 and FY25. The first half of FY26 saw profit pressure from higher costs and seasonal factors, but analysts expect earnings to stabilise as capacity upgrades take effect.
What to expect on listing day
A grey‑market premium of roughly Rs 10.6 (about 46% above issue price) suggests strong secondary‑market interest, though such premiums are not guaranteed. The IPO is a 100% offer for sale, meaning no fresh capital is raised, but the cash‑generating nature of the business still makes it attractive.
Disclaimer
Remember, this is perspective, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.