IPO Note : Bharat Coking Coal Ltd By Nirmal Bang Ltd by Nirmal Bang Ltd
BACKGROUND
Bharat Coking Coal Limited (BCCL) is a subsidiary of Coal India Limited and the largest domestic producer of coking coal in India, accounting for ~59% of indigenous output, with operations concentrated in the Jharia coalfields of Jharkhand, the country’s only source of prime coking coal. The company produces ~35–42 MTPA of coal, supplies the steel sector with coking coal, and monetises non-coking coal and washery by-products through the power sector, while ongoing 7 MMT washery expansions are aimed at improving product mix, realisations and reducing dependence on imported coking coal for steel sector.
Details of the Issue:
The public issue consists of Offer for Sale aggregating up to Rs. 1071 Cr.
Investment Rationale:
* India’s Leading Coking Coal Producer with Strategic Mining Footprint.
* Well Positioned to Benefit from India’s Growing Coking Coal Demand. ? Strong parentage of Coal India Limited
Valuation and Recommendation:
BCCL offers a compelling investment opportunity in India’s structurally constrained coking coal market, supported by its position as the largest domestic producer, strong parentage under Coal India Limited, and long-term demand visibility from India’s 300 MTPA steel capacity target by FY2031. With 7,910 MMT of geological reserves and ~40 MMT annual production, BCCL is well placed to meet rising domestic demand, while washery expansions are expected to improve product mix and margins over the medium term. Despite temporary H1 FY26 disruptions due to heavy rains, the company has demonstrated stable revenues and a sharp EBITDA margin expansion from 4% in FY23 to 13% in FY25, supported by a near-zero net debt balance sheet. Valuations at 5.6x FY25 EV/EBITDA remain reasonable, leading us to recommend Subscribe to the issue.
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SEBI Registration number is INH00000176
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