In a strategic step toward restructuring and monetizing its assets, Coal India Limited (CIL) has filed the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for the proposed initial public offering (IPO) of its subsidiary, Bharat Coking Coal Limited (BCCL). This move marks another milestone in the government’s broader initiative to boost public sector efficiency and transparency.
Key Details of the IPO
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IPO Type: The offering is entirely an Offer for Sale (OFS), with Coal India planning to divest up to 465.7 million equity shares of BCCL. Since no fresh equity is being issued, the proceeds will go directly to Coal India rather than to BCCL.
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Regulatory Submission: The DRHP has been filed with SEBI, and the company intends to list the shares on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
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Lead Managers and Registrar: ICICI Securities and IDBI Capital Markets & Securities have been appointed as the Book Running Lead Managers for the IPO. KFin Technologies has been appointed as the registrar to the issue.
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Allocation Structure: In accordance with SEBI’s Issue of Capital and Disclosure Requirements (ICDR) regulations, 60% of the Qualified Institutional Buyer (QIB) portion will be reserved for Anchor Investors. One-third of the anchor book is set aside for domestic mutual funds.
Strategic Importance
Bharat Coking Coal Limited, headquartered in Dhanbad, is a key producer of coking coal in India, crucial to the country’s steel and metallurgical industries. The company’s listing is expected to enhance its operational visibility and provide investors with direct access to India’s critical coal segment.
The IPO is part of a wider restructuring initiative by Coal India, which recently initiated similar steps for another subsidiary, Central Mine Planning & Design Institute Limited (CMPDIL).
Implications for Investors and Market
The listing of BCCL is likely to attract institutional and retail investors seeking exposure to the coal and energy sector. It also supports the government’s agenda of monetizing state-owned assets and improving capital efficiency in public sector undertakings.
The pricing, valuation, and dates for the IPO will be disclosed once SEBI reviews and approves the DRHP. Market sentiment and global energy trends will play a significant role in determining the success of the offering.