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Bharat Coking Coal

• Bharat Coking Coal is coming out with a 100% book building; initial public offering (IPO) of 46,57,00,000 shares of 10 each in a price band Rs 21-23 per equity share. 
• Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
• The issue will open for subscription on January 09, 2026 and will close on January 13, 2026.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 10 and is priced 2.10 times of its face value on the lower side and 2.30 times on the higher side.
• Book running lead managers to the issue are IDBI Capital Markets & Securities and ICICI Securities.
• Compliance Officer for the issue is Bani Kumar Parui.

Profile of the company

The company is largest coking coal producer in India in Fiscal 2025 in terms of coking coal production, which accounted for 58.50% of the domestic coking coal production in Fiscal 2025. Its primary product is coking coal, with an estimated reserve of approximately 7,910 million tonnes, as of April 1, 2024, making it one of the largest coking coal reserve holder in India. It produces various grades of coking coal, non-coking coal and washed coals for applications primarily in the steel and power industries.

The company is a wholly-owned subsidiary of Coal India Limited (CIL) and was conferred with Mini Ratna status in 2014. It was incorporated in 1972 to mine and supply coking coal concentrated in mines located at Jharia, Jharkhand and Raniganj, West Bengal coalfields. It has expanded its operations significantly over the years, with its coal production increasing from 30.51 million tonnes in Fiscal 2022 to 40.50 million tonnes in Fiscal 2025, which is an increase of 32.74% over Fiscal 2022. Further, its coal production was 15.75 million tonnes in the six months period ended September 30, 2025, as compared to its coal production in six months period ended September 30, 2024, which was 19.09 million tonnes. In Fiscal 2024, it produced 39.11 million tonnes of coking coal and 1.99 million tonnes of non-coking coal, surpassing its previous records of coking coal production.

It operates across a total leasehold area of 288.31 square kilometers, covering 252.88 square kilometers of the Jharia coalfield and covering 35.43 square kilometers of the Raniganj coalfield. Its operational portfolio includes (i) opencast and underground mining projects, (ii) coal washeries; (iii) monetisation of old and idle coal washeries through the Washery Developer and Operator (WDO) route; and (iv) restoration of operations in discontinued underground mines through the Mine Developer and Operator (MDO) model. In addition, it monetize its solar power projects through a combination of self-consumption and grid injection.

Proceed is being used for:

• Carrying out the Offer for Sale of up to 465,700,000 Equity Shares of face value of Rs 10 each of the company by the Promoter Selling Shareholder
• Achieving the benefits of listing the Equity Shares on the Stock Exchanges

Industry Overview

The main minerals mined in India are coal, iron ore, and limestone, which are intricately linked to the country's power, steel, and cement industries. Coal, the primary source of fuel for India's thermal power plants, accounts for over 75% of the country's electricity generation.21 The power sector, which is heavily reliant on coal, is also closely tied to the steel and cement industries, as electricity is a critical input for the production of steel and cement. Coal and iron ore are the bedrock of India's mineral wealth, playing a critical role in driving the nation's industrial and economic progress. These minerals not only fuel the country’s energy needs but also support the backbone of its manufacturing sector, particularly in steel production. Given India's large population (largest country by population in the world with approximately 1.44 billion people in 2024 according to IMF estimates) and rapidly growing economy (6.4% real GDP growth rate expected from CY2025 to CY2030, according to the IMF), the demand for energy is ever-increasing, making thermal coal indispensable for ensuring energy security. The importance of coal is further underscored by its widespread use in various industries, from cement to chemicals, contributing significantly to India's industrial output.

The growth in coal consumption parallels India's economic expansion over the past decade. The increased demand for energy, particularly from coal, highlights the country's industrial and infrastructural growth. As of 2024, India accounted for 14% of global coal consumption, standing as the second-largest consumer after China (which dominates with a 56% share). In terms of absolute figures, India's coal consumption, measured in EJ, has risen significantly. In 2013, India's coal consumption stood at 14.4 EJ. By 2024, this figure escalated to 23.0 EJ, underscoring a substantial increase in energy demand within the country. India’s energy landscape also heavily depends on the fossil fuel, with the country consuming about 13% of the world’s coal. Coal-based thermal power plants continue to dominate electricity generation in India, accounting for approximately 73% in Fiscal 2024. The India coal industry is highly fragmented with a presence of few large players and several medium and small players. CIL (313 operating mines) and Singareni Collieries Company Ltd (SCCL; 40 operating mines) dominates the coal production in the country with production by other captive and commercial players.

The Ministry of Coal (MoC) has set a goal to produce 1150 MMT of domestic coal by Fiscal 2026 and 1500 MMT by Fiscal 2030 to advance the vision of Atma-Nirbhar Bharat ensuring India's energy security by substituting imported coal with domestic coal. In Fiscal 2025, India produced approximately 1048 MMT coal. Going forward, the government has brought in a series of reforms and measures to address import substitution of coal. The critical points to be considered in import substitution are assured supply of quality and of quantity of coal by companies that will help in bridging the gap between the requirement and indigenous availability & to improve the quality. 

Pros and strengths

Largest coking coal producer in India with access to large reserves: The company is largest coking coal producer in India in Fiscal 2025 in terms of coking coal production, which accounted for 58.50% of the domestic coking coal production in Fiscal 2025. As of March 31, 2025, India’s total coal resource is estimated to be 389.4 billion metric tonnes, with coking coal resources amounting to 36.8 billion tonnes. It holds 7.91 billion tonnes of these coking coal resources, as of April 1, 2024, making it the only source of prime coking coal in India. With its substantial reserves, it ensures a steady supply of coking coal to meet the demands of its customers across industries such as steel plants, thermal power plants, cement manufacturers and fertilizer industry that rely on coal as a primary fuel or input. As India's largest coking coal producer, the company benefits from economies of scale, bolstered by the strategic significance of coking coal in steel production.

Strategically located mines with large washeries: The company’s mines are strategically located in the Jharia and Raniganj coalfields, which have a vast reserve of coal resources. It is a market leader in coking coal washery capacity in India, with an owned operational capacity of 13.65 million tonnes per annum. Its strategically located mines and large washeries represent a significant competitive advantage that enhances operational efficiency, reduces costs, and ensures high-quality coal production. Each of its mines have varying seams that allow for mining of different nature of coal thereby ensuring it to diversify its revenue streams from its mining operations. The company’s mines in Jharia and Raniganj coalfields are situated in regions with well-developed infrastructure and logistical networks. This geographical advantage minimizes transportation costs and time, as the mines are often located near major transportation routes, including railways and highways.

Well positioned to capitalize on demand for coking coal in India: The demand for coking coal in India stands at 67 million metric tonnes in Fiscal 2025 and is expected to reach 138 million metric tonnes by Fiscal 2035. The demand for coking coal in India is expected to rise substantially, driven by the growth of the steel and power industries. It is a well positioned to capitalize on demand for coking coal in India since the demand for coking coal in India is expected to rise, driven by the steel industry’s growth. Its large resource base strengthens its position as a major player in the Indian coking coal industry, making it less vulnerable to resource depletion.

Strong parentage of Coal India Limited: The company’s relationship with Coal India Limited provides it with a solid foundation and extensive resources that are pivotal to its success. Coal India Limited is the largest coal producing company in the world. It benefits significantly from their strategic support and vast resources. This includes access to advanced technologies, a pool of skilled professionals, and robust financial backing. These resources enable it to undertake large-scale projects with confidence, ensuring timely and efficient execution. Its ability to leverage these assets sets it apart from its competitors and positions it for continued success.

Risks and concerns

High revenue concentration risk from limited customer base: The company’s business largely depends upon its top 10 customers which accounted for 83.89%, 82.46%, 88.88%, 80.79% and 83.10% of its revenue from operations in the six months period ended September 30, 2025 and 2024 and Fiscals 2025, 2024 and 2023, respectively. Loss of all or a substantial portion of sales to any of its top 10 customers, in particular for any reason (including, due to loss of contracts or failure to negotiate acceptable terms, loss of market share of these customers in their industries, disputes with these customers, adverse change in the financial condition of these customers, decline in their sales, plant shutdowns, labour strikes or other work stoppages affecting production of these customers), could have an adverse impact on its business, results of operations, financial condition and cash flows.

Concentration of operations and revenues in coking coal: A significant portion of the company’s revenues is derived from the production of raw coking coal, which accounted for 77.20%, 74.13%, 75.72%, 75.75% and 74.79% of its revenue from operations in the six months period ended September 30, 2025 and 2024 and Fiscals 2025, 2024, and 2023, respectively. Any decline in demand for coking coal, whether due to fluctuations in global economic conditions, regulatory changes aimed at reducing carbon emissions, technological advancements in alternative materials, increased competition, or economic downturns, could adversely affect its business, results of operations, financial condition, and cash flows.

Substantial concentration of operations in specific geographic regions: As of September 30, 2025, the company operates a network of 34 operational mines, including 4 underground mines, 26 opencast mines, and 4 mixed mines. The company’s operations are entirely concentrated in the Jharia coalfield in Jharkhand and the Raniganj coalfield in West Bengal, which are critical sources of its coal production. This geographic concentration exposes it to significant risks, including the potential depletion of coal reserves in these regions. The coal reserves in these regions are finite and may eventually be depleted. The exhaustion of coal reserves in Jharia, Jharkhand and Raniganj, West Bengal could materially and adversely affect its business, results of operations, financial condition, and cash flows.

Disruption in vendor services could materially adversely affect operations: The company strategically collaborates with vendors to support its business activities, sourcing essential materials such as high-speed diesel and explosives, and procuring services including coal production, overburden removal, coal transportation and loading, and coal washing. It typically enters into contractual agreements with such vendors wherein the payment terms are contingent upon the volume of supply or production achieved. Any disruption in the supply of these services, whether due to vendor financial instability, operational inefficiencies, natural disasters, regulatory changes, or other unforeseen circumstances, could have a material adverse impact on its ability to conduct its exploration activities effectively and efficiently.

Outlook

Bharat Coking Coal Limited (BCCL) is engaged in the production of coking coal, non-coking coal, and washed coal. The company is a wholly-owned subsidiary of Coal India Limited. It is the largest coking coal producer in India with access to large reserves. It is well-positioned to capitalise on demand for coking coal in India. On the concern side, the company’s mines and washeries are concentrated in Jharia, Jharkhand and Raniganj, West Bengal and the eventual exhaustion of coal reserves in these areas or its inability to successfully exploit existing reserves may adversely affect its business, results of operations, financial conditions and cash flows. Moreover, a significant portion of its revenues is derived from production of raw coking coal. Any decline in demand for raw coking coal could have an adverse impact on its business, results of operations, financial condition and cash flows. 

The issue has been offering 46,57,00,000 in a price band of Rs 21-23 per equity share. The aggregate size of the offer is around Rs 977.97 crore to Rs 1071.11 crore based on lower and upper price band respectively. Minimum application is to be made for 600 shares and in multiples thereon, thereafter. On performance front, the company’s revenue from operations (net of levies) decreased by 3.11% from Rs 142,458.60 million in Fiscal 2024 to Rs 138,025.50 million in Fiscal 2025, primarily due to decrease in net sales and other operating revenue. Moreover, the company’s profit for the year was Rs 12,401.90 million in Fiscal 2025 compared to Rs 15,644.60 million in Fiscal 2024.

The increasing production capacity of the steel and other allied industries in India present considerable growth and expansion opportunities for coal mining companies in India. It intends to capitalize on such market opportunities by leveraging its resources to enhance its operational capacity, market presence and profitability through implementation of strategic initiatives focused on sustainable growth and increased production. Going forward, the company is aiming at identifying and continuously adding new producing patches by hiring the heavy earth moving machinery (HEMM). This approach provides quick enhancement of production capacity and replaces depleted reserves. It is also encouraging the conversion of overburden into valuable construction sand through the planned establishment of a sand extraction plant at its Damoda open cast coal project. This initiative not only optimizes resource utilization but also supports sustainable development by reducing waste and promoting eco-friendly practice.