The IPO of Bharat Coking Coal (BCCL) is in great discussion among investors. On Monday, January 12, it entered the second day of IPO bidding. By noon of the second day it was subscribed approximately 22 times. Let us tell you that on the very first day the investors accepted it wholeheartedly and the issue was fully subscribed within a few minutes of opening. Overall, this IPO was subscribed 8.09 times on the first day, due to which its sentiment seems quite strong in the market. This IPO opened on January 10 and will close on January 13. Earlier, the company had raised ₹273.1 crore from anchor investors.
What is the price band?
The price band of BCCL IPO has been fixed at ₹21 to ₹23 per share. This entire issue is Offer for Sale (OFS), that is, the promoter Coal India is selling its stake and the company will not get any new money from this IPO. The minimum lot size for retail investors is 600 shares, which will require an investment of around ₹13,800 at the upper price band. For this reason, this IPO is considered quite accessible for small investors also. The allotment of shares is expected to be finalized on January 14 and the shares are likely to arrive in the demat account on January 15.
Tremendous rise in gray market
BCCL IPO is also very popular in the gray market. According to Investorgain.com, its GMP was running at ₹10.6 on the morning of January 12. This means the share could fetch around ₹33–34 at the time of listing, which is about 46% more than the issue price of ₹23. If this happens, investors can get good profits on the day of listing. The company’s shares are expected to be listed on BSE and NSE on January 16.
company business
Bharat Coking Coal is the largest coking coal producing company in the country, with about 58.5% share in domestic production. It is a 100% subsidiary of Coal India and has coal reserves of approximately 7,910 million tonnes. The demand for coal in India still exceeds production, due to which import remains necessary. SBI Securities has advised to subscribe to this IPO in view of the company’s strong financial track record and future expansion plans. However, experts also say that being OFS, investors should take decisions wisely from a long term perspective.