Analysis- Bharat Coking Coal Ltd IPO

PROs:

  • Largest Coke Producer in India in terms of Coking coal production in FY 25.

  • Hugh reserves of Coking coal of approx. crore tonnes as of April 2024

  • Market leader in Coal Washing Capabilities with Operational Capacity of 13.65 million tonnes/annum.

  • Has strong parentage of Coal India Ltd

  • Focus on overburden removal. Will help in future coking coal production.

  • Record production & operational efficiency achieved with heavy earth moving machine

  • Increasing Capex each year for long term growth

  • Reasonable valuations compared to global peers.

  • Strong Investor demand.

CONs:

  • Company is heavily dependent of Power and steel sector.

  • Fires and Land subsidence incidents risk increases cost, affects production

  • Dependency on contractors for Coking coal production. More than 80% production by contractors

  • Most business comes from Zarkhand and West Bengal state only

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