Bharat Coking Coal IPO

Bharat Coking Coal Limited (BCCL) is India's largest producer of coking coal — the grade of coal that steelmaking needs and that India overwhelmingly imports. Incorporated in 1972 and a wholly-owned subsidiary of Coal India Limited operating under the Ministry of Coal, it was granted Mini Ratna status in 2014. It accounted for roughly 58.50% of all domestic coking coal production in FY25 and sits on estimated reserves of about 7.9 billion tonnes as of April 2024, among the largest coking coal reserves in the country. Operations run across 34 mines in Jharkhand and West Bengal — 26 opencast, 4 underground and 4 mixed. It also operates five coking coal washeries with combined capacity of about 13.7 million tonnes a year, the largest coking coal washing capacity in India, and sells washed coking coal, raw coking coal and non-coking coal to steel, power, fertiliser and other industrial buyers.

BCCL mines coal and, increasingly, washes it before sale — washing is where the margin is, because blended washed domestic coking coal substitutes for imported coal in steel furnaces. Revenue is concentrated and contractual: the top ten customers account for more than 80% of sales, and offtake arrangements include a memorandum of understanding with SAIL for 1.8 million tonnes of washed coking coal and an agreement with Tata Steel to use spare third-party washery capacity. Three further washeries totalling 7 MTPA are planned, and discontinued underground mines are being brought back through the Mine Developer and Operator route on a revenue-sharing basis, with 6 of 10 such mines already awarded to private operators. The company is also exploring coal bed methane. Being a cash-rich state enterprise shapes the reported numbers: other income was about ₹599 Cr in FY25, which is why total income of ₹14,401.63 Cr exceeds revenue from operations of ₹13,802.55 Cr and why margins quoted on the two bases differ by several percentage points.