Coal India is readying the initial public offering of two of its subsidiaries, Bharat Coking Coal and Central Mine Planning and Design Institute, in the financial year 2024-25. This has been long-anticipated since 2022 when this very company declared an intention to offload 25% of BCCL shares and list them on the stock exchange. Now, the listing is expected with a small lag by the government in the current financial year.
BCCL has drastically improved, become profitable, and paid its dues. In FY 2022-23, BCCL posted a profit after tax of ₹ 645.01 crore against ₹111.62 crore in the previous year. Even CMPDI posted growth, with a net profit of ₹296.66 crore in FY23 against ₹282.12 crore in FY22.
BCCL is the leading coal mining organization in India’s coal sector and supplies nearly half of the total coking coal used in the Indian steel industry. CMPDI, headquartered in Ranchi, is the consulting arm of Coal India, with a mandate in research, mineral exploration, and working projects.
The government has shelved earlier plans to integrate the seven subsidiaries of Coal India into a single unit. Instead, they are now considering freeing BCCL and ECL from fuel supply agreements. In turn, BCCL and ECL will be free to sell coal in the open market, which would really improve their fiscal health and flexibility.
Coal India’s history with IPOs has been huge. The raising of ₹15,199 crore remained the biggest PSU IPO until LIC’s IPO passed it in 2022. The government still holds a 63.13 percent stake in Coal India and has sold shares through various routes like Offer for Sale and exchange-traded funds.
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Coal India is most likely to overshoot its capital expenditure target this year. Because it plans to cut coal production in the coming year, the extra stock continues to be in trouble after surging to an all-time high of over 38 million tonnes.
People May Ask
What is the anticipated timeline for listing BCCL and CMPDI’s IPO?
The listing of BCCL and CMPDI’s IPOs is scheduled to begin in the 2024-25 financial year.
Why the listing of BCCL has been delayed?
The listing has been delayed due to multiple procedural steps, which are likely to be completed by the next financial year.
What is the significance of freeing BCCL and ECL from fuel supply agreements?
This will allow these subsidiaries to freely offload their coal in the market, which may improve their financial performance and operational flexibility.
Will Coal India be lowering its production as a result of the current high stock levels?
Yes, Coal India is contemplating scaling down its production in this financial year, 2024-25, to deal with record stock levels.
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