The offer, which closes on January 13, is entirely an offer for sale worth Rs 1,071 crore, with shares set to list on the BSE and NSE on January 16. However, GMP should be read as a sentiment indicator rather than a guarantee of listing gains.
Grey market trades are informal, unregulated, and often thinly traded, making premiums vulnerable to sharp swings based on broader market conditions, subscription trends, or global risk sentiment. A strong GMP ahead of the issue does not necessarily translate into sustained performance post listing.
Bharat Coking Coal’s IPO has drawn attention not only because of the elevated GMP but also due to its strategic positioning within India’s coal ecosystem. The company is a wholly owned subsidiary of Coal India and the country’s largest producer of coking coal, a critical input for steelmaking.
In FY25, Bharat Coking Coal accounted for 58.50% of India’s domestic coking coal production, underlining its importance to the core industrial economy.
As per the offer documents, the company operates 34 mines across Jharkhand and West Bengal and holds estimated coking coal reserves of around 7,910 million tonnes. Production has risen steadily over the past three years, climbing from 30.51 million tonnes in FY22 to 40.50 million tonnes in FY25, aided by a mix of opencast and underground operations, washeries, and asset monetisation initiatives.
The IPO is also expected to see interest from eligible shareholders of Coal India, who can apply under the shareholder quota, subject to a separate investment cap. The record date for determining eligibility under this category is January 1, meaning only investors holding Coal India shares as of that date qualify, irrespective of later transactions.This structural feature often adds a layer of demand in PSU-linked offerings, though its impact on subscription becomes clear only once bidding begins.
Financially, Bharat Coking Coal reported a profit after tax of Rs 1,240 crore in FY25, with a ROCE of over 30%, reflecting strong operating leverage.
For investors tracking the GMP as an early signal, the key takeaway is caution. While the current premium reflects optimistic sentiment around the issue, grey market cues can change rapidly as the subscription window opens and market conditions evolve.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)