Bharat Coking Coal shares rally 4% on Day 2. Should you buy?

Shares of Bharat Coking Coal Ltd (BCCL) rose 4.24% to Rs 42.29 on Tuesday, extending gains from their blockbuster market debut a day earlier. The stock had listed on Monday at a 97% premium to its issue price and ended the session with 77% gains, making it the best-performing IPO on listing day since December 2024 and the first mainboard IPO of the new year.

The Rs 1,071-crore IPO witnessed one of the strongest subscription responses in recent years, drawing bids worth over Rs 1.1 lakh crore. Exchange data showed demand for 50.93 billion shares at the upper end of the price band of Rs 23, translating into bids of around Rs 1.17 lakh crore, highlighting strong investor appetite.

What should investors do now?

Shivani Nyati, Head of Wealth at Swastika Investmart, advised traders and short-term investors to consider booking profits, while long-term investors may continue to hold the stock with a stop-loss of Rs 35, keeping a medium-to-long-term perspective. “The stellar listing was driven by strong fundamentals, BCCL’s strategic role in India’s steel and metallurgical coal supply chain, and a positive outlook for the coal and core infrastructure sectors. Heavy IPO oversubscription across categories translated into aggressive buying on debut,” she said.

Rajan Shinde, Research Analyst at Mehta Equities, said BCCL offers exposure to a strategically critical asset with a dominant position in India’s coking coal value chain. He cited the company’s large reserve base in the Jharia coalfields, leadership in coking coal washery capacity, and strong logistics infrastructure as key competitive advantages. “Backed by Coal India’s technical and financial strength, BCCL is well placed to benefit from structural demand tailwinds and India’s import substitution push. With washery expansion, asset monetisation and normalisation of mining activity, we expect a recovery in volumes and earnings from FY2027, supporting long-term value creation,” Shinde said.

Gaurav Garg, Research Analyst at Lemon Markets Desk, said the strong response to the issue reflected investor confidence in BCCL’s near-monopolistic position in India’s coking coal segment and its long-term demand visibility.

Meanwhile, speaking to ET Now, Mukesh Agrawal, Director (Finance), Coal India, said BCCL’s strong earnings outlook provides ample financial flexibility. From FY27 onwards, the company expects annual profits exceeding Rs 2,000 crore, along with Rs 400–500 crore in depreciation, translating into cash generation of around Rs 2,500 crore per year.

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“Against this, our annual capex requirement is only about Rs 1,000 crore over the next five years. BCCL can comfortably fund its growth plans through internal earnings without the need for external borrowing,” Agrawal said.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)