Investing in Bharat Coking Coal IPO? Check 5 key risks before you decide

Bharat Coking Coal IPO: The initial public offering (IPO) of Bharat Coking Coal, a subsidiary of Coal India, opened for public subscription today, January 9, 2026. Within a few hours of opening, the issue was booked over 5 times, receiving a strong response from investors. 

 

As of 01:45 PM, the issue received bids for 1.90 billion shares against 346.94 million shares on offer, translating into an overall subscription of 5.50 times. The three-day subscription window will close on Tuesday, January 13. 

 

The demand was led by Non-Institutional Investors (NIIs), who subscribed to their reserved quota by 10.32 times. The portion reserved for retail investors was booked 6.4 times, and the shareholders' quota was booked 7.01 times. However, the employees' portion was subscribed to 62 per cent, while the portion reserved for qualified institutional buyers (QIBs) was subscribed to 24 per cent. 

 

The ₹1,071.11-crore public issue comprises an offer for sale (OFS) of 465.7 million shares by promoter Coal India. BCCL IPO is being offered at a price band of ₹21 to ₹23 per share. The minimum application size has been set at 600 shares per lot. The company’s shares are tentatively scheduled to make their D-Street debut on Friday, January 16, 2026.

Key risks associated with investing in the Bharat Coking Coal IPO:

Caution on reserve and resource estimates: The company’s reserve and resource base figures included in its Red Herring Prospectus (RHP) are estimates, and actual production, revenues, and expenditures related to these reserves and resources could differ significantly from these projections. Furthermore, certain reserve and resource information has been prepared and classified in accordance with the Indian Standard Procedure (ISP) guidelines. These estimates have not been audited by SRK Mining Services (India) (SRK) and may differ from international reporting standards.

 

Geographic concentration: BCCL’s mining and washing operations are concentrated in the Jharia coalfield, Jharkhand, and the Raniganj coalfield, West Bengal, which are critical to its coal production. As of September 30, 2025, it operates 34 mines, including 4 underground, 26 opencast, and 4 mixed mines. This geographic concentration exposes the company to risks, including the eventual depletion of coal reserves, which could materially impact its business, financial condition, operations, and cash flows.

 

Revenue dependence on coking coal: According to the RHP, a large portion of the company’s revenue is derived from raw coking coal, which accounted for 77.20 per cent, 74.13 per cent, 75.72 per cent, 75.75 per cent and 74.79 per cent of revenue from operations in the six-month periods ended 30 September 2025 and 2024, and FY25, FY24 and FY23, respectively. Any decline in demand for raw coking coal could adversely affect the company’s business.  The coal is primarily used in the power sector and may not match the quality of washed coal, which forms a smaller part of production. Economic slowdowns, reduced industrial activity, regulatory changes, technological advancements in steelmaking, competition from other coal or alternative energy sources, and shifts toward cleaner energy could all reduce demand and pose risks to revenue growth.

 

Dependence on raw material supply: BCCL relies on a steady supply of raw materials such as explosives, timber, oil, lubricants, and HEMM spares. Prices and availability can fluctuate due to factors beyond the company's control, including market demand, fuel costs, climatic conditions, and government policies. While procurement has been stable in the six months ended September 30, 2025, and the last three Fiscals, future disruptions could adversely affect the company’s operations, costs, and financial performance.

 

Revenue concentration risk: The company derives a significant portion of its revenue from its top 10 customers, which accounted for 83.89 per cent, 82.46 per cent, 88.88 per cent, 80.79 per cent and 83.10 per cent of revenue from operations in the six months ended September 30, 2025 and 2024, and FY25, FY24 and FY23, respectively. Loss of any of these customers, due to contract issues, financial difficulties, production disruptions, or other reasons, could materially impact the company’s business.