Newsletter
The government’s disinvestment engine is back in motion, and this time it has picked a familiar but largely unexplored name from India’s coal ecosystem. Bharat Coking Coal Limited, better known as BCCL, is heading to the stock markets, becoming the first Coal India subsidiary to be listed as part of the Centre’s broader asset monetisation push.
This IPO arrives at an interesting moment. Coal demand in India is still strong, steel capacity is expanding aggressively, but profitability in the sector has turned visibly volatile over the last year. That mix makes this IPO hard to ignore and even harder to simplify.
Bharat Coking Coal is not a new company trying to prove its relevance.
It has been around since 1972 and operates almost entirely in Jharkhand and parts of West Bengal, sitting on some of India’s most valuable coking coal reserves.
What makes BCCL strategically important is not just that it mines coal, but that it mines coking coal, a critical raw material for steel production. India imports a large portion (85%) of its coking coal needs, and BCCL remains the country’s largest domestic producer in this category. That alone gives the company an importance that goes beyond balance sheets.
Let’s look at the ownership structure here.
BCCL is a wholly owned subsidiary of Coal India Limited, the world’s largest coal producer. Coal India acts as the holding company, policy interface, and capital allocator for BCCL.
Until now, BCCL has operated largely as an internal cash-generating arm, with profits flowing upstream. This IPO does not change control. Coal India will continue to hold around 90% post listing. What changes is visibility, accountability, and the pressure of public markets.
Importantly, this IPO is not about funding BCCL’s growth directly. It is about Coal India selling a small slice of its stake to unlock value.
From an IPO structure standpoint, this is a straightforward offer-for-sale. There is no fresh issue component. No new money comes into the company. All proceeds go to Coal India. Here are the key IPO details:
Now comes the part that actually matters. The numbers.
BCCL’s financial story over the last three years looks impressive, but only if you stop reading halfway.
Revenue grew from about ₹12,600 crore in FY23 to ₹14,246 crore in FY24, before easing to around ₹13,803 crore in FY25. Profits tell a sharper story. Net profit jumped from ₹665 crore in FY23 to a peak of ₹1,565 crore in FY24. That is a massive jump and reflects a period of strong coal pricing, better realisations, and operating leverage.
In FY25, profit fell to ₹1,240 crore, still healthy, but clearly off the peak.
Then comes the reality check. In the first half of FY26, profit collapsed to about ₹124 crore. An 80-plus percent drop year-on-year. This happened due to, the company has explained in the RHP and subsequent disclosures; extremely heavy monsoons disrupted mining operations, coal prices softened, and costs rose as deeper seams and higher stripping ratios kicked in. This is not accounting jugglery. This is commodity reality.
Here is a snapshot of the recent financials:
| Metric | FY23 | FY24 | FY25 | H1 FY26 |
|---|---|---|---|---|
| Revenue (₹ cr) | 12,624 | 14,246 | 13,803 | 5,659 |
| EBITDA (₹ cr) | ~930 | ~2,450 | ~2,300 | ~460 |
| Net Profit (₹ cr) | 665 | 1,565 | 1,240 | 124 |
| EBITDA Margin | ~7% | ~17% | ~16% | ~8% |
| ROCE | ~18% | ~47% | ~30% | NA |
So what’s actually good here?
First, BCCL has proven it can generate serious profits in a favourable environment. Clearing accumulated losses and paying dividends for the first time in decades is not trivial. The balance sheet is clean, with negligible long-term debt. Cash flows during good years have been strong. This gives the company resilience.
Second, the asset base is real and irreplaceable. Nearly eight billion tonnes of coking coal reserves in operational zones is not something competitors can replicate easily. This matters in a country trying to reduce import dependence for steelmaking.
Third, BCCL is actively trying to shift its business mix. Today, roughly three-fourths of revenue still comes from thermal power customers, which are lower margin and slower paying.
The company’s stated strategy is to push more washed coking coal to steel producers. Washeries are being expanded, and future production growth is expected to be directed almost entirely towards steel.
But the negatives are equally real.
Earnings volatility is not a one-off issue. Coal mining is inherently cyclical and operationally fragile. Weather, geology, regulatory approvals, and global pricing all play a role. The sharp fall in H1 FY26 profit is a reminder that peak earnings should never be blindly extrapolated.
Customer concentration is another risk. Power utilities dominate the revenue mix, and delayed payments have already shown up as rising receivables. That strains working capital and reduces cash conversion.
Then there is coal quality. Indian coking coal is high ash. Steel plants prefer imported coal for consistency and efficiency. Even with washing, BCCL’s coal will compete on price rather than quality. That limits pricing power.
From a valuation standpoint, the IPO implies a market capitalisation of roughly ₹10,700 crore at the upper price band. Based on FY25 earnings, the P/E is around 8.5 times.
Compared to global coking coal peers like Warrior Met Coal or Alpha Metallurgical Resources, this looks cheap. But those companies operate in different geographies, export higher-grade coal, and are not PSUs. Compared to Coal India itself, the valuation sits broadly in line with sector expectations.
Competition is limited domestically because BCCL dominates coking coal production in India. The real competition is imported coal. That is where price cycles and global supply-demand dynamics come into play.
So what does this IPO really represent? It is not a growth startup story. It is not a clean energy pivot. It is a monetisation of a strategic asset at a time when coal is still relevant, but its future is increasingly complex. For investors, the decision is less about whether coal has a future and more about whether volatility, PSU governance, and commodity cycles fit their risk appetite.
BCCL’s IPO does not come with easy answers. It comes with data, history, and trade-offs. And that is exactly where the real decision begins.
FAQs
What is Bharat Coking Coal Limited IPO about?
The Bharat Coking Coal IPO is a public listing of a Coal India subsidiary through an offer for sale. Coal India is selling a 10 percent stake, while the company itself is not raising fresh capital. The IPO mainly aims to unlock value, improve transparency, and give public investors exposure to India’s largest domestic producer of coking coal.
Is Bharat Coking Coal a subsidiary of Coal India?
Yes, Bharat Coking Coal Limited is a wholly owned subsidiary of Coal India Limited before the IPO. After listing, Coal India will continue to hold around 90 percent stake, retaining full management and operational control over the company.
What does Bharat Coking Coal do?
Bharat Coking Coal is engaged in mining and supplying coking coal and non-coking coal. Its coal is primarily used by thermal power plants and steel manufacturers. Coking coal is especially important for steel production, making the company strategically important for India’s industrial ecosystem.
Why is coking coal important for India?
Coking coal is a key raw material used in steelmaking. India imports a large portion of its coking coal requirements due to limited domestic supply. Bharat Coking Coal is the largest domestic producer, which helps reduce import dependence and supports India’s expanding steel capacity.
Does Bharat Coking Coal IPO raise money for the company?
No, the IPO does not raise fresh funds for Bharat Coking Coal. It is a 100 percent offer for sale, meaning all proceeds go to Coal India. The company will continue to fund its operations and expansion through internal cash flows.
Why were Bharat Coking Coal profits volatile recently?
Profits declined sharply in the first half of FY26 due to heavy monsoon rains disrupting mining, softer coal prices, and rising operating costs. Coal mining is highly sensitive to weather conditions and commodity price cycles, which directly impacts earnings.
How strong are Bharat Coking Coal’s financials?
The company has shown strong profitability in recent years, especially in FY24, when it cleared past losses and paid dividends. It has low debt and decent cash flows. However, earnings are cyclical and can fluctuate sharply depending on coal prices and production conditions.
Who are Bharat Coking Coal’s main customers?
Most of the company’s revenue comes from thermal power plants, which account for nearly three-fourths of sales. Steel companies currently form a smaller portion, though the company plans to increase steel sector exposure by expanding coal washing capacity.
How is Bharat Coking Coal valued compared to peers?
At the IPO price, Bharat Coking Coal is valued at a lower multiple compared to global coking coal producers. However, global peers operate in different markets with higher-grade coal. Domestically, there are no direct listed peers, making valuation comparisons limited.
What are the key risks investors should understand?
Key risks include earnings volatility, dependence on power sector customers, coal quality challenges, rising mining costs, environmental regulations, and PSU-related governance limitations. Since coal is a cyclical and regulated industry, long-term performance can vary significantly.
