Bharat Coking Coal Limited's initial public offering entered its second day of bidding on January 12, 2025, maintaining strong momentum after achieving remarkable oversubscription on its opening day. The IPO, which opened for subscription on January 10, will close on January 13, 2025.

Exceptional First Day Performance

The public offering demonstrated exceptional investor appetite, achieving full subscription within minutes of opening on the first day. By the end of Day 1 trading, the issue was subscribed 8.09 times, significantly exceeding expectations and highlighting strong market confidence in the company's prospects.

IPO Structure and Pricing Details

The entire issue represents an offer for sale by its promoter Coal India Limited, meaning no proceeds will be received by Bharat Coking Coal Limited directly. Prior to the public offering, the company successfully raised ₹273.10 crore from anchor investors, demonstrating institutional confidence in the offering.

Strong Grey Market Premium Signals

The IPO has generated significant interest in the grey market, with current indicators suggesting substantial listing gains for investors.

According to data from investorgain.com, the grey market premium stands at ₹10.60, indicating an expected listing price of ₹33.60 per share. This represents a premium of over 46% to the upper price band of ₹23, suggesting strong investor confidence in the company's market debut.

Company Profile and Market Position

Bharat Coking Coal Limited holds a dominant position in India's coking coal sector, establishing itself as the country's largest producer in this critical industrial segment. The company contributes approximately 58.5% of domestic coking coal output in FY25, demonstrating its strategic importance to India's steel and industrial sectors.

As a wholly owned subsidiary of Coal India Limited, Bharat Coking Coal benefits from the backing of India's largest coal mining company. The company holds estimated coal reserves of nearly 7,910 million tonnes, providing a substantial resource base for long-term operations and growth.

Market Outlook

Shares of Bharat Coking Coal Limited are scheduled to list on both BSE and NSE on January 16, 2025. The strong subscription numbers and positive grey market premium suggest robust investor interest, though actual listing performance will depend on broader market conditions and investor sentiment at the time of debut.

Bharat Coking Coal Limited's initial public offering has demonstrated robust investor appetite, achieving 8.09 times subscription by the second day of bidding. The ₹1,071 crore offer for sale by Coal India has attracted strong participation across investor categories, with the subscription period running until January 13.

Subscription Performance Across Categories

The IPO has witnessed exceptional demand from retail and institutional segments. By 17:00 IST, the company received bids for 2,80,61,36,400 shares against the 34,69,46,500 shares on offer.

Grey Market Premium and Listing Expectations

The current grey market premium stands at ₹10.6, indicating strong investor sentiment. Based on this premium and the upper price band, the estimated listing price is projected at ₹33.6 per share, representing a 46.09% premium over the issue price of ₹23.

Analysis of the last 10 sessions shows the current GMP indicates a downward trend from previous highs.

Brokerage Recommendations

Leading financial institutions have issued positive recommendations for the IPO. Canara Bank Securities maintains an optimistic outlook, recommending "SUBSCRIBE" for long-term gains, particularly for investors with medium to high risk tolerance. The brokerage highlights the company's association with Coal India and robust fundamentals, while noting concerns about seasonal variations due to rainfall impacts in the Dhanbad area.

Nirmal Bang advises subscription, noting the company's stable revenue streams and significant EBITDA margin improvement from 4% in FY23 to 13% in FY25. The brokerage considers the 5.6x FY25 EV/EBITDA valuation attractive, supported by a nearly debt-free balance sheet.

Anand Rathi suggests subscription for potential listing gains, citing the company's market leadership and pricing at approximately 8.64 times price-to-earnings ratio based on FY25 earnings.

Company Profile and Market Position

Bharat Coking Coal, a wholly-owned subsidiary of Coal India, holds the leading position in India's coking coal production sector. In fiscal year 2025, the company accounted for approximately 58.5% of the nation's coking coal production. The company possesses an estimated 7.91 billion tonnes of coking coal reserves, positioning it as the primary domestic source of high-grade coking coal essential for steel production.

IPO Timeline and Valuation Metrics

The offer consists entirely of an offer for sale by Coal India, which holds a complete 100% stake in Bharat Coking Coal. Prior to the public offering, the company secured ₹273.10 crore from anchor investors.

At the upper price range, the issue is valued at approximately 9 times price-to-earnings ratio and nearly 2 times price-to-book ratio according to offer documents. All proceeds from the ₹1,071 crore IPO will be directed to Coal India as the selling shareholder.