Coal India Set for ₹600 Crore Profit from BCCL IPO in 2026

Introduction

State-owned mining major Coal India Ltd. is positioned to realize a substantial financial gain from the upcoming initial public offering (IPO) of its subsidiary, Bharat Coking Coal Ltd. (BCCL). The parent company plans to divest a 10% stake through a complete offer for sale (OFS), a move expected to generate a profit of more than ₹600 crore. This IPO marks the first mainboard issue of 2026 and is a key component of Coal India's broader strategy to unlock value from its various subsidiaries. The public issue is scheduled to open for subscription on January 9, 2026, and will close on January 13, 2026, with shares expected to be listed on both the BSE and NSE.

Details of the Public Offering

The IPO for Bharat Coking Coal Ltd. consists entirely of an offer for sale of 46.57 crore equity shares by its promoter, Coal India. With no fresh issue of shares, BCCL will not receive any of the proceeds; the entire amount will go to the selling shareholder. The price band for the issue has been fixed at ₹21 to ₹23 per share. At the upper end of this band, the total issue size is valued at approximately ₹1,071 crore. The offering has a structured allocation, with 50% reserved for Qualified Institutional Buyers (QIBs), 35% for retail investors, and the remaining 15% for Non-Institutional Investors (NIIs).

Financial Gains for Coal India

The divestment is set to be a highly profitable transaction for Coal India. According to the Red Herring Prospectus, Coal India's weighted average cost of acquiring BCCL shares was ₹10 per share. With the IPO priced between ₹21 and ₹23, Coal India stands to earn a profit of ₹12 to ₹13 on each share sold. At the upper price band, the total proceeds will amount to ₹1,071 crore. After deducting the acquisition cost of approximately ₹466 crore for the stake being sold, the net profit for Coal India is calculated to be nearly ₹605 crore. This represents a significant return of around 130% on its original investment, highlighting the value unlocked through this strategic listing.

IPO Timeline and Key Dates

Investors looking to participate in the BCCL IPO should be aware of the following schedule. The anchor investor bidding is set for January 8, 2026. The public subscription period will run from January 9 to January 13, 2026. The basis of allotment for the shares is expected to be finalized on January 14, with refunds and the credit of shares to demat accounts scheduled for January 15. The shares of BCCL are slated to make their stock market debut on the BSE and NSE on January 16, 2026.

Special Reservations for Shareholders and Employees

In addition to the standard investor categories, the IPO includes special reservations. A portion of up to 2.32 crore shares has been reserved for eligible employees of the company. Furthermore, 10% of the issue, or up to 4.66 crore shares, is set aside for eligible shareholders of Coal India. Individuals who held shares of Coal India on or before the record date of January 1, 2026, will be eligible to apply under this shareholder quota, providing them with a preferential opportunity to invest in the subsidiary.

About Bharat Coking Coal Ltd. (BCCL)

Incorporated in 1972, BCCL is a key subsidiary of Coal India and holds a dominant position in the domestic market. It was the largest producer of coking coal in India during fiscal year 2025, accounting for 58.5% of the country's total coking coal output. The company's operations are primarily concentrated in the Jharia coalfield in Jharkhand and the Raniganj coalfield in West Bengal. As of September 2025, BCCL operated a network of 34 mines, which includes 26 opencast mines, 4 underground mines, and 4 mixed mines. The company also runs five coal washeries and is in the process of developing three more to enhance its processing capacity.

Financial Performance Overview

BCCL's financial performance has seen some fluctuations. For the fiscal year ended March 2025, the company reported a net profit of ₹1,240.2 crore on revenue of ₹13,802.6 crore. This marked a decline from the previous fiscal year, where it had recorded a profit of ₹1,564.5 crore on revenue of ₹14,245.9 crore. Despite the recent dip, the company's production has shown an upward trend over the years, increasing from 30.51 million tonnes in FY22 to 40.50 million tonnes in FY25.

Market Impact and Strategic Divestment

The announcement of the BCCL IPO has been received positively by the market, contributing to a rise in Coal India's stock price. In the five days leading up to the announcement, Coal India's shares gained 6.29% to close at ₹426. The listing is the first in a series of planned divestments, with Coal India's board having already approved IPOs for other major arms like Mahanadi Coalfields Ltd. and South Eastern Coalfields Ltd. This broader strategy aims to monetize key assets and improve transparency through market discipline. In the unofficial grey market, BCCL's shares are reportedly commanding a premium of ₹13.5 to ₹14, indicating strong investor interest ahead of the listing.