Bharat Coking Coal IPO Sees GMP Surge 46%, Brokerages Divided
Overview
Bharat Coking Coal's Rs 1,071 crore IPO, closing January 13, is attracting investor scrutiny. The offer-for-sale issue has seen its grey market premium climb nearly 50%, suggesting strong listing potential. Brokerage houses present mixed recommendations, with some advocating subscription for growth prospects and others adopting a neutral stance due to valuation or operational factors.
Bharat Coking Coal IPO Draws Heavy Interest
Bharat Coking Coal Limited's Rs 1,071.11 crore initial public offering is nearing its January 13 closing date, capturing significant investor attention. The issue, structured entirely as an offer-for-sale involving 46.57 crore equity shares, operates within a price band of ₹21-23 per share.
Strong Grey Market Performance
The company's shares are trading at a considerable premium in the unofficial grey market. Current indications place the grey market premium (GMP) at approximately ₹10.60 per share. This surge translates to an estimated listing price of ₹33.60, representing nearly a 46% jump above the IPO's upper price band. However, market participants caution that grey market trends are volatile and do not guarantee future listing performance.
Brokerage Recommendations Diverge
Leading brokerage firms have issued varied assessments of the IPO. Anand Rathi Research recommends subscribing to the issue, citing fair valuation at 8.64 times FY25 earnings and the company's consistent track record. They anticipate listing gains.
Deven Choksey Research points to a solid annual profit growth of 36.6% between FY23-FY25, alongside a 4.6% revenue CAGR. They view the valuation as attractive at 5.5 times post-issue EV/EBITDA, supported by government initiatives for coal self-sufficiency, despite acknowledging operational challenges.
SBI Securities echoes the positive sentiment, highlighting revenue and profit growth figures and significant capacity expansion plans, including new washeries. They also advocate for subscription at the cut-off price, valuing the issue at 6.4 times post-issue EV/EBITDA.
ICICI Direct, however, adopts a more neutral outlook. While noting the company's EBITDA margins and Return on Capital Employed (RoCE), they have assigned an 'Unrated' tag to the IPO, indicating a less decisive stance compared to other analysts.
