In today’s Finshots Markets edition, we break down the Bharat Coking Coal IPO, which opened for subscription today and closes on January 13th, 2026.

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The Story

India loves coal, plain and simple. And that's despite whatever environmentalists, green energy conservationists or economists say. We just can't get enough of it — whether it's for keeping our lights on and appliances running, or making the steel that goes into our buildings.

After China, which produces and consumes about 56% of the world’s coal, India comes second with a 14% share. And we seem to have no plans of slowing down anytime soon.

Now before you go ahead and think, “What else is new?” hear us out. Not all coal is the same. Sure, the image that pops up in your head is accurate: a black, rugged rock that burns to release heat. That’s the stuff we use to power our cities, known as thermal coal.

But there’s a far rarer cousin hiding in the shadows — coking coal.

And what makes the two different is the science behind their use. You see, thermal coal (or non-coking coal) goes into power plants where it’s simply burned to produce heat. That heat turns turbines. And that, in turn, produces electricity that flows everywhere from your laptop to your metro station.

Coking coal, on the other hand, is a different beast altogether. It’s about 90% carbon, with far fewer impurities, which means it burns hotter and behaves very differently under extreme temperatures. When heated without air, it transforms into coke — a tough, carbon-rich material that’s indispensable to the steelmaking process.

This makes coking coal the hidden backbone of India’s construction and infrastructure story. Without it, you don’t get molten iron. Without molten iron, you don’t get steel. And without steel… well, there’s no India growth story to speak of.

And that brings us to why we’re talking about this today.

Bharat Coking Coal Ltd (BCCL) — the largest producer of coking coal in the country — is now coming out with a complete offer-for-sale (OFS), ₹1,071 crore bookbuilding IPO. So BCCL won’t see any of that ₹1,071 crore. It all goes back to the government through Coal India, its parent.

To give you a bit of background, BCCL was incorporated as a subsidiary of Coal India Ltd to supply and mine coking coal from the Jharia coalfields in Jharkhand and the Raniganj coalfields in West Bengal. This was a time when the coal sector was mostly messy and dominated by private players. Concerned about the direction of the coal industry, the government effectively nationalized coking coal mines in 1971 with the Coking Coal Mines (Emergency Provisions) Act, 1971. And a year later, BCCL was nationalized. With over fifty years of operations, they’ve managed to capture about 58% of the coking coal production in India. How? Because India’s dependence on coking coal becomes even clearer when you look at the supply side. Even though we’re the world’s second-largest producer and consumer of coal overall, the kind we actually need for steelmaking is something we barely have. 22% of total coal imports in 2024 was coking coal. Domestic coking coal reserves are limited, geological conditions are difficult, and much of what’s available is high in ash content, which makes it unsuitable for efficient steel production.

As a result, India ends up importing close to 90% of its coking coal requirement from countries like Australia, the US, Canada and Russia. In other words, we build our infrastructure at the mercy of global mining giants and global commodity prices — an uncomfortable spot for any fast-growing economy. And this is exactly the gap BCCL has spent fifty years trying to fill.

At its core, BCCL’s business model is straightforward. It extracts raw coking coal from some of India’s oldest underground and opencast mines in the Jharia and Raniganj coalfields. This coal is then processed through washeries, where the impurities are removed to produce higher-grade coking coal and coke — the actual feedstock required in blast furnaces. The company then supplies this to steel manufacturers, power plants, and other industrial users at notified prices.

Now, because BCCL is a subsidiary of Coal India, it also carries a strategic mandate: ensure consistent domestic availability of coking coal even when imports become expensive or volatile. This makes BCCL less of a high-flying commercial miner and more of a stabilising force in India’s steel value chain.

And even doing so, BCCL has been on a healthier trajectory financially. It reported revenues of around ₹14,400 crore in FY25, slightly lower than the ₹14,452 crore posted the previous year. Profit, however, dipped from ₹1,564 crore in FY24 to around ₹1,240 crore in FY25, though both years mark a significant improvement from FY23, when profit stood at just ₹665 crore. The company has also begun paying dividends — a sign that it has cleared past losses and stabilised cash flows. Its pre-IPO numbers show a price to earnings (P/E) ratio of about 8.6x, ROCE (strong return on capital employed) of nearly 30%, and an RoNW (return on networth) of around 21%, suggesting that despite being a PSU in a cyclical sector, BCCL is running an efficient mining operation.

And because the company has zero debt, most of its cash flows directly go to operations and dividends instead of repayments.

But that doesn’t mean the business is without risk. Because of how cyclical it is, business also fluctuates a lot. Coking coal, unlike thermal coal, is a downstream industry. Any hit towards the economy, housing demand and infrastructure directly means a hit towards BCCL.

Probably the biggest risk of all is where the coal is being used. You see, despite calling themselves a coking coal company, 74% of the total sales came from the power sector, and only 18% actually was from the steel industry in FY25.

The company also has only one major steel customer — SAIL — which accounts for around 14–17% of its revenue, exposing it to payment delays and working-capital pressures. Then there’s the long-term shift toward cleaner steelmaking techniques globally, including electric arc furnaces and hydrogen-based production. While these technologies are still evolving and far from mainstream in India, they represent a structural headwind for the future. Add to that the usual risks of a PSU — slower decision-making, regulatory oversight, and pricing constraints — and it’s clear that BCCL operates in a tricky landscape.

And we cannot talk about coal without bringing up the environmental impact.

The steel sector alone emitted around 240 million tonnes of CO₂ in 2020 — nearly 12% of India’s total emissions. And since steel is made in blast furnaces fuelled by coking coal, the sector’s carbon footprint is directly tied to how much of this coal we dig and burn.

Globally too, coal remains the biggest climate offender. In 2023, China accounted for 55.5% of all coal-related CO₂ emissions, followed by India at 13.2%, the US at 5%, Russia at 2.8% and South Africa at 2.1%. It’s a club no country wants to lead, but one we remain firmly in.

And here’s the real problem — coking coal contributes to emissions twice. First during mining, washing and transportation. Then again inside the blast furnace when it’s used to turn iron ore into steel. So for a country already battling rising AQI levels and choking cities, coking coal quietly doubles the environmental cost of every tonne of steel we produce.

So yeah, on one hand, BCCL is a strategic asset. It’s India’s largest domestic source of coking coal at a time when the country desperately needs more local supply. Its financials have improved, profitability is reasonable, and its role in the steel ecosystem isn’t going away anytime soon. But at the same time, it remains tied to a commodity cycle, dependent on a handful of large customers, and exposed to long-term shifts that could change steelmaking. And whether that makes for a good investment depends entirely on how comfortable you are riding the coal and steel cycle.

Until then…

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