- 08 Apr 2025
- ICICIdirect Research
INDIA IS EXPECTED TO LAUNCH THE INITIAL PUBLIC OFFERINGS OF ITS WHOLLY OWNED SUBSIDIARIES
COALINDIA - 387 Change: -1.75 (-0.45 %)News: As per media sources, Coal India is expected to launch the initial public offerings of its wholly owned subsidiaries Central Mine Planning and Design Institute (CMPDI) and Bharat Coking Coal Limited (BCCL), in FY26. Around~25% of equity in both BCCL and CMPDI is likely to be listed, which will be carried out in two to three tranches. The company is expected to file the the Draft Red Hearing Prospectus by May’25.
View: BCCL produced ~40.5 MT of coking coal in FY25, fulfilling nearly 50% of the steel industry's total coking coal requirement. In FY24, BCCL reported an 8% YoY revenue growth, reaching ₹17,600 crores, with PAT margins improving to 9%, up from 4% in FY23. On the other hand, CMPDI, Coal India’s consultancy arm, offers expertise in mineral exploration, mining solutions, and infrastructure engineering. In FY24, CMPDI recorded a robust 25% YoY revenue growth to ₹2,041 crores, with PAT margins rising to 25% from 18% in FY23. Given that coking coal typically commands better margins than thermal coal, we believe BCCL could potentially trade at a premium price-to-book multiple compared to Coal India. Thus, this will unlock value for Coal India and sentimentally positive for the company.
Impact: Positive