Bharat Coking Coal’s initial public offering (IPO) is in focus. The issue is open for subscription till January 13. Investor attention is now turning to pricing, issue structure and brokerage assessments ahead of the proposed listing.
The company has a price band of Rs 21-23 per share for the Rs 1,071.11 crore IPO and it is entirely an offer-for-sale, involving 46.57 crore equity shares.
Bharat Coking Coal IPO: What brokerages are saying on valuation and risks
The GMP is strong, up nearly 50%. The big question now is whether the issue is a ‘Subscribe’ or ‘Avoid’. Here are top analyst views
Anand Rathi Research on Bharat Coking Coal IPO
Anand Rathi Research, in its IPO note, said, “Bharat Coking Coal, with a strong market share in the industry valued at 8.64x P/E on FY25 earnings (at the upper band) is valued fairly. Considering the company’s consistent track record & superior financial metrics, the valuation is fully priced in. Hence, we recommend subscribing to the IPO for listing gains.”
Deven Choksey Research on Bharat Coking Coal IPO
Deven Choksey Research pointed to operational constraints while also flagging sector-level support, stating, “Operational challenges like high ash content and contractor reliance persist, but the government coal self-sufficiency push supports growth.” They have highlighted that the company’s revenue grew 4.6% annually on a compounded basis between FY23-FY25.
The annual profit growth between FY23-FY25 has been 36.6% on a compounded basis. At the upper end of the price band at Rs 23 they believe valuations are attractive, “ at EV/EBITDA of 5.5x post-issue, it appears attractive given scale and prospects.”
SBI Securities on Bharat Coking Coal IPO
SBI Securities highlighted “capacity expansion and valuation” in its report, saying, Historically, as per their estimates, the company has recorded revenue growth of 4.6% annually between FY23-FY25 on a compounded basis. The profit after tax in the same period grew 36.6%annually. Going ahead, they believe that the key positives include the “company expanding its Washery capacity to 20.65 MTPA from the current 13.65 MTPA through establishment of new washeries, along with the renovation of the existing Moonidih washery which shall double its operative capacity from 0.8 MTPA to 1.6 MTPA. At the upper price band of Rs 23, the issue is valued at EV/EBITDA multiple of 6.4x respectively based on post-issue capital. We recommend investors to SUBSCRIBE to the issue at the cut-off price.”
ICICI Direct on Bharat Coking Coal IPO
ICICI Direct adopted a more neutral tone, noting that Sales/profit at BCCL have grown at a CAGR of 5%/37%, respectively, over FY23-FY25. “BCCL clocked EBITDA margins of 12.7% in FY25 with RoCE at 18.2%. IPO of BCCL is priced at ~5.5x EV/EBITDA and ~8.6x P/E on FY25. ” THey have assigned the BCCL IPO ‘Unrated’ in their analysis.
Bharat Coking Coal IPO: Grey market premium trend
In the unofficial market, Bharat Coking Coal shares were trading at a premium of around Rs 10.60 per share. This suggested an estimated listing price of about Rs 33.6 per share, nearly 46% above the upper end of the issue price.
However, it is important to note that grey market trends are unofficial and can change quickly. The listing price can be very different from GMP indications.