India’s biggest coking‑coal producer, Bharat Coking Coal Ltd., is launching an Offer for Sale (OFS) to raise about ₹1,071 crore.
What the OFS means
The OFS will let existing shareholders sell a portion of their stake. Coal India, the current promoter, will see its holding fall from 100% to roughly 90% after the deal.
Company snapshot
Bharat Coking Coal is a Miniratna public‑sector unit operating 34 mines in Jharkhand and West Bengal. It holds 7.9 billion tonnes of coking‑coal reserves, the only source of prime coking coal in the country.
- Annual coking‑coal production rose to 38.9 million tonnes in FY25.
- Three new washeries are under construction, adding 7 million tonnes of capacity.
- Industry forecasts say Indian coking‑coal demand could double to 138 MT by FY35.
Financial highlights
Recent numbers show steady growth, but also some bumps.
- Revenue: ₹13,802 crore in FY25 (up 5% YoY).
- Net profit: ₹1,240 crore in FY25 (up 37% YoY).
- EBITDA margin improved to 16% from 6.8% two years earlier.
- Trade receivables days rose to 40, indicating longer cash‑collection cycles.
- Dividend policy: at least 30% of net profit or 5% of net worth, whichever is higher.
Key risks and opportunities
Investors should weigh the following factors.
- Customer concentration: Top 10 buyers account for about 80% of revenue.
- Working‑capital cycle: Longer collection periods could strain cash flow.
- Renewable‑energy shift: Growing clean‑energy use may curb long‑term coal demand.
- Weather impact: Heavy rains have previously cut short‑term earnings.
- Growth upside: New washeries and rising steel‑sector demand support long‑term expansion.
Who might consider buying?
The OFS is suited for retail investors who can handle higher risk and are looking for long‑term exposure to India’s steel supply chain.
Disclaimer
Remember, this is my perspective, not a prediction. Do your own research and consider your risk tolerance before investing.