Tea Post Files Draft Papers for IPO...
14 Jun, 2025
To maximize the value of its subsidiaries, Coal India Limited (CIL) has filed the Draft Red Herring Prospectus for the IPO of Bharat Coking Coal Limited (BCCL) with SEBI, NSE, and BSE. As the largest producer of coal in India, BCCL is planning its IPO as a pure Offer for Sale (OFS). Coal India plans to sell up to 46.57 crore equity shares, which is the total equity stake held by Coal India. Since no new shares will be issued, all revenue accruing from the IPO will be retained by Coal India.
All the proceeds would go to Coal India because the equity shares of the BCCL IPO will not be externally sourced. In total, 46.57 crore shares will be put up for the Coal India tender for sale, subject to market and regulatory clearance. The band pricing, date of issuance, and minimum bidding size will be publicized after consultations with the lead book running managers. When approved, BCCL will be listed on NSE and BSE, thus improving its market profile and operational autonomy.
For FY25, Bharat Coking Coal reported an operational net profit of ₹1,240.19 crore, marking a 20.7% decline from ₹1,564.46 crore in FY24. Revenue from operations in FY25 was ₹13,998.45 crore, showing a decrease of 0.33% from the previous fiscal year’s ₹14,045.34 crore. The company’s revenue is primarily driven by the sales of raw coking coal, which has remained above 76% of operational revenue in the past few years.
BCB’s IPO filing came shortly after another Coal India subsidiary, the Central Mine Planning and Design Institute Limited (CMPDI), filed its DRHP a week earlier. Also, the IPO from CMPDI will only be a secondary market transaction or an Offloaded Public sale (OFS) for the sale of 7.14 crore shares from Coal India. Assuming both IPOs clear the regulator, these would greatly expand the supply side of the consultancy market in the coal and minerals value chain in India and also hopefully improve the operational freedom of the subsidiaries.
According to SEBI rules, up to 60% of the QIB portion in the BCCL IPO may be allocated to Anchor Investors on a discretionary basis. Out of that, one-third will be earmarked for domestic mutual funds, provided there are valid bids at or above the Anchor Investor Allocation Price. No green shoe option is being considered on this offer.
BCCL has major responsibilities in the supply of high-grade coking coal, which is one of the essential inputs for steel manufacturing in India. The company’s DRHP remarks that coking coal prices are currently in a correction phase and supply-side conditions should ease because of the expansion of Australian mines and new approvals. Supply is steady, mainly due to Indian demand.
The company, Coal India, with more than 80% of the nation’s coal output, recently reported a 12% YoY consolidated net profit growth in Q4 FY25 at ₹9,604.02 crore despite a slight decline in revenue. His continued profits, coupled with a strategic listing of his subsidiaries, reinforce the Indian core energy and minerals industry’s drive for corporate governance, transparency, independence, and active stakeholder interaction.
In a correlated Coal India development, the company has confirmed that Mukesh Choudhary, Director (Marketing), shall continue to hold his position and also take up the additional responsibility as Director (Business Development) for an approximate term of three months or until a suitable candidate is found, effective June 1, 2025.
The anticipated initial public offering (IPO) of Bharat Coking Coal Limited is a marked step for Coal India concerning transparency and value unlocking strategically. With BCCL and potentially CMPDI listing, Coal India will provide new investment opportunities in the energy and mining markets, reinforcing their operational excellence and value-adding market growth.
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