Also, in terms of applications, the IPO set a new record with 90.31 lakh applications. Waaree Energies, which held its IPO in late 2024, is in second place with 82.65 lakh applications.
The IPO was subscribed almost 147 times in total, reflecting broad participation across all categories of investors despite increased volatility in the stock markets. Qualified institutional buyers led the charge with 311 times subscription, while non-institutional investors bid 258 times the shares reserved for them. Retail investors subscribed their share 49 times, employees about five times and shareholders 87 times.
The overwhelming demand comes at a time when India’s benchmark indices are struggling to find direction, highlighting the magnitude of interest in Bharat Coking Coal.
Analysts attribute the response to a combination of scarcity value, the strategic importance of coking coal to India’s steel industry and the relatively modest valuation at which the company has come to market.
Gaurav Garg, research analyst at Lemonn Markets Desk, said the strong response reflects confidence in Bharat Coking Coal’s monopolistic position and long-term demand visibility. It noted that exceptional oversubscription in the non-institutional segment points to comfortable valuation and earnings expectations in the listing, while strong retail and shareholder participation indicates confidence in the broader Coal India ecosystem.
Garg added that although QIB demand was more measured relative to other categories, the overall underwriting trend suggests favorable sentiment in the secondary market driven by the scarcity value of an exclusive coking coal producer.
Bharat Coking Coal IPO Value
Bharat Coking Coal is India’s largest producer of coking coal and the only significant domestic source of premium coking coal, a critical raw material for steelmaking. According to its offer documents, the company had estimated reserves of around 7.91 billion tonnes as of April 2024, representing about 21.5% of India’s total coking coal resources.
In FY25, it contributed nearly 58.5% of the domestic coking coal production and operated 34 mines in Jharkhand and West Bengal. This dominant position has made the company central to India’s efforts to reduce dependence on imported coking coal.
At the upper end of the price band, the IPO values Bharat Coking Coal at a market capitalization of approximately Rs 10,711 crore. In terms of post-issuance capital, the valuation is equivalent to approximately 6.4 times EV/EBITDA, which several analysts consider reasonable given the company’s long reserve life, operating scale and monopoly position in a segment where entry barriers are high.
Analysts take
SBI Securities, which recommended subscribing to the issue, highlighted the growing gap between supply and demand for coking coal in India as steel production capacity continues to expand. The brokerage points to Bharat Coking Coal’s dominant reserve base and its kinship with Coal India as key strengths, giving it access to capital, technical expertise and logistical advantages that are difficult to replicate.
A key part of the investment case is the company’s focus on coal beneficiation. Bharat Coking Coal currently operates washing machines with an own capacity of 13.65 million tonnes per annum and is in the process of adding three new washing machines with a combined capacity of 7 million tonnes per annum, along with renovation works at the Moonidih washing machine.
Once these projects are completed, total washing capacity is expected to increase to 20.65 million tonnes per year, which could improve realizations and product mix over time by supplying higher quality coal to steel producers.
Financial performance has also strengthened over the past two years. Between FY23 and FY25, the company reported compound annual growth in revenue, EBITDA and PAT of 4.6%, 88.1% and 36.6%, respectively, supported by operating leverage and pricing.
However, profitability moderated in the first half of FY26 due to cost pressures and seasonal factors, a reminder that profits may remain sensitive to operational disruptions and weather-related issues.
Rajan Shinde, research analyst at Mehta Equities, said the IPO offers exposure to a strategically critical asset with enduring competitive advantages. He pointed to Bharat Coking Coal’s large reserve base in the Jharia coalfields, leadership in washing capacity and strong logistics infrastructure as factors creating high barriers to entry and supporting long-term cash generation.
While acknowledging that recent performance was affected by temporary disruptions, it expects volumes and profits to recover from FY27 as mining activity normalizes and new washers come online.
Healthy anchor book
The anchor book of the IPO, which was fully subscribed at 1x, contributed to investor confidence. Shares worth Rs 273 crore were allocated to anchor investors ahead of the issuance, providing early institutional validation. According to market participants, the strength of the anchor book helped set the tone for aggressive bidding across categories.
Still, some analysts recommend caution. The IPO is a 100% offer for sale worth around Rs 1,068.78 crore, which means no fresh capital will flow into the company. While this does not dilute the underlying business quality, it limits immediate strengthening of the balance sheet and places greater emphasis on executing existing expansion plans.
(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own. They do not represent the views of Economic Times)
