Bharat Coking Coal Ltd (BCCL) has announced its initial public offering (IPO), with shares priced between ₹21 and ₹23. The IPO will remain open from January 9 to January 13, 2026. This ₹1,071.11 crore offering is entirely an offer-for-sale (OFS), comprising 46.57 crore shares being sold by its promoter, Coal India Ltd.
Understanding the Risk Factors of Bharat Coking Coal IPO
Geographic and Resource Limitations
BCCL’s mining operations and washeries are located in Jharkhand’s Jharia region and West Bengal’s Raniganj fields. Over time, the natural exhaustion of coal reserves or challenges in exploiting these resources could affect the company’s operational performance and financial outcomes.
Accuracy of Reserve Estimates
The company’s red herring prospectus provides reserve and resource estimates, but actual production, revenue, and expenditure may vary significantly from these projections. Furthermore, some reserve data is compiled according to Indian Standard Procedure (ISP) guidelines, which are not audited by SRK Mining Services (India) Pvt Ltd and may differ from international standards.
Dependence on Raw Coking Coal
A significant portion of BCCL’s revenue comes from raw coking coal production, which accounted for over 74% of revenue consistently in the past three financial years and the first half of FY26. Any reduction in demand for raw coking coal could negatively impact the company’s financial health.
Supply Chain and Pricing Vulnerabilities
BCCL’s operations rely heavily on the continuous supply and pricing of raw materials, which are subject to fluctuations due to factors beyond the company’s control.
Customer Concentration Risks
The top 10 customers contributed over 80% of total revenue in the past three years. Loss of any major client could have an adverse effect on operations and financial performance.
Strengths of Bharat Coking Coal
Market Leadership
BCCL is India’s largest coking coal producer, accounting for 58.5% of domestic coking coal output in FY25. Its extensive reserves and strategic mining locations provide a competitive edge.
Operational Efficiency and Quality
Large-scale washeries and strategically placed mines enable efficient operations, cost reduction, and high-quality coal production, strengthening the company’s market position.
Rising Domestic Demand
The domestic coking coal demand, currently at 67 million metric tonnes (FY25), is expected to reach 138 million metric tonnes by FY35, driven by the steel and power sectors. BCCL is well-positioned to capitalize on this growth.
Strong Backing from Coal India Ltd
As a subsidiary of Coal India Ltd, the world’s largest coal producer, BCCL benefits from robust institutional support and access to extensive resources.
Financial Stability
BCCL has consistently delivered strong financial results with no long-term debt, highlighting its stable financial footing.
Financial Overview
| (₹ Crores) | FY25 | FY24 | FY23 |
|---|---|---|---|
| Revenue | 13,083.26 | 13,161.1 | 12,349.14 |
| Total Assets | 17,283.48 | 14,727.73 | 13,312.86 |
| Net Profit | 1,240.19 | 1,564.46 | 664.78 |
Grey Market Trends
According to media reports and investorgain.com, unlisted shares of BCCL are trading at ₹34.1, reflecting a grey market premium of 48.26% or ₹11.1 over the upper price band of ₹23.
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