Coal India share price gains 12% in 1 month, arm BCCL’s IPO opens: Things to know before the IPO launch

Money raised from anchor investors

On Thursday, January 8, Bharat Coking Coal Ltd (BCCL), a wholly owned subsidiary of Coal India Ltd and the country's largest coking coal producer, raised ₹273.1 crore from anchor investors ahead of its IPO, the company said on Thursday.

BCCL said it had allotted 11,87,53,500 equity shares to anchor investors at ₹23 per share.

Marquee investors participating in the anchor book include Life Insurance Corporation of India, Societe Generale, Copthall Mauritius Investment Ltd, Citrine Fund, M7 Global Fund, PCC-ASAS Global Opportunities Fund, Maybank Securities and Rajasthan Global Securities Pvt Ltd.

Among equity-orientated mutual funds, shares were allotted to UTI Dividend Yield Fund and other UTI schemes, Nippon Life India Trustee -- A/C Nippon India Small Cap Fund, and Bandhan Small Cap Fund.

Out of the total anchor allocation, 71,739,600 equity shares were allotted to three domestic mutual funds through eight schemes.

IPO details

The IPO is entirely an offer for sale (OFS) by Coal India, which currently holds a 100% stake in Bharat Coking Coal. Proceeds from the IPO amounting to ₹1,071 crore at the upper price band of ₹23 will go to Coal India.

Here is the calculation

According to BCCL's Red Herring Prospectus (RHP), state-owned miner Coal India Ltd is set to pocket a profit of over ₹600 crore by divesting a 10% stake in BCCL through the latter's upcoming initial public offering (IPO).

As per the document, Coal India's weighted average cost of acquisition of BCCL shares stands at ₹10 per share. With the IPO price band fixed at ₹21-₹23 per share, the miner is expected to earn a profit of ₹12-13 per share on the stake being sold.

At the upper end of the price band, Coal India will receive around ₹1,071 crore from the IPO, which is a 100% offer for sale (OFS) issue. After factoring in the acquisition cost of about ₹466 crore, the net gain works out to nearly ₹605 crore, translating into a return of around 130% on the original investment.

Bharat Coking Coal IPO shareholder quota

Bharat Coking Coal aims to raise ₹1,071 crore via its initial public offering. Since the company is a wholly owned subsidiary of Coal India, it has reserved shares worth ₹107.1 crore for Coal India shareholders (10% of issue size). However, under the shareholders' quota, there will be no further discount for the IPO applicants.

The Bharat Coking Coal shareholder quota is important, as an application under this category further increases the chance of allotment compared to the general retail category.

Who is eligible for the BCCL shareholder quota?

As per BCCL IPO documents, investors who held Coal India shares on or before January 1, 2026, will be eligible to apply under the shareholder quota for the BCCL IPO. BCCL shareholder quota is only available for individual investors and HUF investors.

Investors holding even one share of Coal India can apply under the BCCL shareholder quota. Meanwhile, the maximum application amount under the shareholder category is ₹2 lakh.

Other key details

The BCCL listing is the first in a series of planned divestments of Coal India's major subsidiaries and also the first mainboard issue of 2026. BCCL said the proposed IPO is aimed at unlocking value in Coal India's subsidiary.

The BCCL listing is part of Coal India's broader plan to monetise its key subsidiaries. The company's board has already approved IPOs of other arms, including Mahanadi Coalfields Ltd and South Eastern Coalfields Ltd.