Management

• Manoj Kumar Agarwal (Chairman cum Managing Director, Chief Executive Officer and Director (Finance), additional charge)
• Murli Krishna Ramaiah (Director Human Resources)
• Sanjay Kumar Singh (Director Technical)
• Niladri Roy (Director Technical, additional charge)
• Sanoj Kumar Jha (Part-time Official Director)
• Mukesh Choudhary (Part-time Official Director)
• Arun Kumar Oraon (Non-official Independent Director)
• Satya Raju Masapogu (Chief Financial Officer)

Use of Proceeds

The issue is entirely an offer for sale of Rs 1,071.11 cr.

Competitive Strengths

Largest coking coal producer in India with access to large reserves The company is the largest coking coal producer in India in FY 2025, accounting for 58.50% of domestic coking coal production, underscoring its dominant market position. India’s total coal resources are estimated at 389.4 billion metric tonnes as of March 31, 2025, of which coking coal constitutes 36.8 billion tonnes. As of April 1, 2024, the company holds 7.91 billion tonnes of coking coal resources, making it the only source of prime coking coal in India. It holds mining leases over 28,830.95 hectares, providing scale, cost efficiency, and long-term resource security.

Strategically located mines with large washeries The company’s mines are strategically located in the Jharia and Raniganj coalfields, regions endowed with vast and high-quality coal reserves. These locations provide proximity to established industrial clusters and well-developed logistics infrastructure, including railways and highways, which significantly reduce transportation costs and turnaround time. The company is the market leader in coking coal washery capacity in India, with an owned operational capacity of 13.65 million tonnes per annum. The combination of strategic geography and large washery capacity enhances operational efficiency, improves coal quality, and strengthens the company’s competitive positioning in domestic markets.

Well-positioned to capitalize on the demand for coking coal in India India’s coking coal demand stood at 67 million metric tonnes in FY 2025 and is projected to reach 138 million metric tonnes by FY 2035, driven by expansion in the steel and power sectors. The company is well-positioned to meet this rising demand due to its large and high-quality resource base, particularly in the Jharia coalfields rich in prime coking coal. Its extensive mining operations, washeries, and well-developed transport and evacuation infrastructure enable efficient extraction and supply, reducing dependence on imports and supporting India’s long-term industrial growth.

Strong parentage of Coal India Limited and consistent financial performance The company benefits from strong parentage under Coal India Limited, which provides strategic support, technical expertise, financial strength, and access to advanced mining technologies. Coal India Limited oversees executive manpower, enabling cross-subsidiary knowledge sharing, while CMPDIL supports exploration and R&D initiatives. This backing enhances operational excellence, innovation, and governance standards. Financially, the company has maintained a consistent track record with no long-term debt, reflecting strong balance sheet stability. Effective cost management and operational discipline have enabled it to maintain healthy profitability despite cyclical industry conditions and market volatility.

Consistent track record of growth and financial performance The company has demonstrated a consistent and resilient financial performance over the years, reflecting strong operational and financial discipline. Its balance sheet remains robust, with no long-term debt, highlighting a high degree of financial stability and prudent capital management. The company has consistently met and, in several instances, exceeded its operational and financial targets, underscoring management’s execution capability. This performance has been supported by effective cost control and efficiency initiatives, which have enabled optimization of expenses and preservation of healthy profit margins despite volatile market conditions, input cost fluctuations, and broader challenges faced by the coal and energy sector.

Key Risks & Concerns

Geographic concentration and reserve risk The company’s mining and washery operations are concentrated in the Jharia, Jharkhand and Raniganj, West Bengal coalfields. Any faster-than-expected exhaustion of coal reserves in these regions or challenges in successfully exploiting existing reserves could adversely impact production levels, operational continuity, financial performance, and long-term cash flow sustainability.

Dependence on raw coking coal demand A substantial portion of the company’s revenue is derived from raw coking coal, which consistently contributed around 74–77% of revenue across recent periods. Any structural or cyclical decline in demand for raw coking coal could materially affect revenues, profitability, operating cash flows, and overall business performance.

Contingent liabilities and financial exposure The company has significant contingent liabilities amounting to Rs 3,598.59 crore as of September 30, 2025, as disclosed in its restated financial information. If these contingent obligations were to crystallize, they could exert pressure on cash flows, weaken the financial position, and adversely affect operating results.

Outlook and Valuation

BCCL remains a critical player in India’s coking coal ecosystem, contributing 58.5% of domestic coking coal production in FY25 and holding estimated reserves of about 7.9 billion tonnes as of April 2024, placing it among the largest reserve holders in the country. The company operates five coking coal washeries with an aggregate capacity of nearly 13.7 million tonnes per annum, the largest in India. With the government targeting 300 million tonnes of crude steel capacity by FY31, coking coal demand is expected to rise to around 161 million tonnes, creating a sustained long-term demand outlook for domestic washed coking coal.

To capitalize on the anticipated growth in steel and power sectors, BCCL is undertaking multiple capacity and efficiency enhancement initiatives. The company plans to commission three new washeries with a combined capacity of 7 million tonnes per annum and monetize older washeries to improve operational efficiency. Strategic collaborations have been strengthened through agreements with Tata Steel to utilize spare washery capacity and with SAIL through an MoU for the supply of 1.8 million tonnes of washed coking coal. Additionally, the company aims to revive discontinued underground mines under the Mine Developer and Operator model, with several mines already awarded on a revenue-sharing basis.

The broader outlook for coking coal remains supported by India’s industrial growth and global steel demand. Coal continues to dominate India’s energy mix, accounting for over 75% of electricity generation and nearly half the total value of minerals mined in FY25. Coking coal plays a vital role in steelmaking due to its ability to form coke, an essential blast furnace input. Globally, rising crude steel production, especially in Asia, underpins coking coal demand. Against this backdrop, BCCL’s large reserve base, expanding washery capacity, diversified mining methods, and exploration of coal bed methane projects position it for sustained operational relevance and long-term growth. BCCL is valued at a P/E multiple of 8.6x based on FY25 earnings, based on the upper price band. We recommend a SUBSCRIBE rating for the issue for the long term.