Coal India Ltd, a state-owned mining company, is poised to gain over Rs 600 crore by selling a 10% stake in its subsidiary, Bharat Coking Coal Ltd (BCCL), through an upcoming initial public offering (IPO). According to the offer document, this divestment is expected to yield significant profits for Coal India.
The IPO price band for BCCL shares is set between Rs 21 and Rs 23 per share. Coal India’s weighted average cost of acquiring these shares was Rs 10 each. This means the company anticipates earning a profit of Rs 12-13 per share from the sale. At the top end of the price range, Coal India stands to receive approximately Rs 1,071 crore from the IPO.
Coal India’s Strategic Divestment Plan
This IPO represents a 100% offer for sale (OFS) issue. After deducting the acquisition cost of around Rs 466 crore, Coal India’s net profit from this transaction is estimated to be nearly Rs 605 crore. This translates into a return of about 130% on their initial investment.
The BCCL listing marks the first major divestment of Coal India’s key subsidiaries and is also the first mainboard issue scheduled for 2026. The IPO aims to unlock value within Coal India’s subsidiary, aligning with the company’s broader strategy to monetise its significant assets.
Upcoming IPOs and Market Impact
Coal India’s board has already approved IPOs for other subsidiaries, including Mahanadi Coalfields Ltd and South Eastern Coalfields Ltd. The BCCL IPO will open for subscription on January 9 and close on January 13, with shares expected to list on the BSE and NSE on January 16, 2026.
Since this issue is entirely an offer for sale, BCCL will not benefit directly from any proceeds; instead, all funds will go to Coal India. In the unofficial grey market, BCCL shares are reportedly trading at a premium of Rs 13.5-Rs 14 above the anticipated issue price.
Market analysts have noted that expectations surrounding these subsidiary listings have positively influenced Coal India’s stock performance. Over the past five days, its share price has risen by 6.29%, reaching Rs 426 per share.
With inputs from PTI
