Bharat Coking Coal IPO subscribed 34x on Day 2, GMP signals strong listing; should you apply?

Bharat Coking Coal IPO Day 2

• Bharat Coking Coal IPO subscribed 34 times its offer size on Day 2
• Non Institutional Investors booked their quota over 96 times
• Shares to list on BSE and NSE on January 16

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The initial public offering of Bharat Coking Coal continued to see strong investor interest on its second day of public bidding on January 12. The Rs 1,071-crore IPO has been subscribed around 34 times its offer size on Day 2.

The maiden public issue of the wholly owned subsidiary of Coal India and India’s largest producer of coking coal received bids for nearly 1,166 crore shares, as against an offer size of 34.69 crore shares.

Non Institutional Investors (NII) showed the most interest in the IPO, booking their reserved portion over 96 times. Retail Individual Investors (RIIs) have subscribed the portion kept for them nearly 27 times, while existing shareholders have booked their quota around 44 times. The portion kept for Qualified Institutional Buyers (QIB) has been booked 1.44 times.

Bharat Coking Coal IPO GMP:

Ahead of listing, the unlisted shares of Bharat Coking Coal were trading with 47.17 percent grey markets premium over the IPO price at Rs 33 apiece, according to data on Investorgain. The GMP quoted by the site has increased from the 46 percent quoted yesterday and 45 percent quoted the day before.

The unlisted shares of the company were trading with 45.65 percent GMP over the IPO price, according to IPO Watch.

About Bharat Coking Coal IPO:

Bharat Coking Coal launched its IPO to raise Rs 1,071.11 crore entirely through an offer for sale of 46.57 crore equity shares by promoter Coal India. The IPO will remain open for public subscription between January 9 and January 13 at a price band of Rs 21-23 per share.

At the upper end of the band, the Mini Ratna company is valued at over Rs 10,700 crore. Investors can bid for a minimum of 600 shares, requiring a minimum investment of Rs 12,600 at the upper price band, and in multiples thereafter.

The allotments will likely be finalized by January 14, and the shares are scheduled to be listed on stock exchanges BSE and NSE on January 16.

Should you apply?

Anand Rathi advised investors to ‘subscribe’ to the issue for listing gains. The domestic brokerage said that the company, with a strong market share in the industry valued at ~8.64x P/E on FY25 earnings (at the upper band) is valued fairly.

Considering the company’s consistent track record & superior financial metrics, the valuation is fully priced in, it added.

Deven Choksey also kept a ‘Subscribe’ rating for the IPO for the long-term. It advised investors to target post-listing stability at 1.5-2x gains potential. The domestic brokerage further said that the company offers a defensive yield with growth upside chances in domestic coal push.

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