Bharat Coking Coal IPO: GMP points to strong debut gains
What's the story
Bharat Coking Coal Limited (BCCL), a subsidiary of state-owned Coal India, is gearing up for its initial public offering (IPO) this week. The company has set a price band of ₹21-23 per share for the public issue worth ₹1,071 crore. The three-day offer will open on January 9 and close on January 13. The entire issue is an offer-for-sale with Coal India selling a 10% stake.
Market expectations
Grey market premium suggests strong listing gains
The gray market premium (GMP) for BCCL's upcoming IPO is hovering around ₹11 per share. This translates to an implied premium of nearly 50% over the upper end of the IPO price band. Retail investors can apply for one lot of 600 shares at a minimum investment of ₹13,800. The issue allocation is 35% for retail investors, 50% for Qualified Institutional Bidders (QIBs), and 10% for Non-Institutional Investors (NIIs).
Market impact
Post-issue market capitalization and stake dilution
At the upper end of the price band, BCCL is expected to command a post-issue market capitalization of ₹10,711 crore. Post-IPO, Coal India's stake in the company will reduce to 90% from 100%, well above the minimum public shareholding requirement of 75%. IDBI Capital and ICICI Securities are the book-running lead managers for this issue. The shares will be allotted on January 14 and are expected to list on the exchanges on January 16.