Coal India plans to sell its remaining 15% stake in BCCL over the next six months after the subsidiary’s strong IPO debut.
BCCL shares listed at nearly double the issue price amid massive investor demand, with the IPO subscribed about 147 times.
Riding on the success of BCCL, Coal India is preparing to launch an IPO of another subsidiary, CMPDI, by March.
Coal India to Divest 15% Stake in BCCL after its Strong Market Debut
Market regulator SEBI mandates that all listed companies must maintain a minimum public shareholding of 25%. Its rule further adds that newly listed companies must reach 25% public shareholding within 3 years of listing.
Coal India to Divest 15% Stake in BCCL after its Strong Market Debut Dapur Melodi
Summary
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Coal India Limited (CIL) is planning to list more of its subsidiaries in phases after the strong stock market debut of Bharat Coking Coal Limited (BCCL).
CIL recently divested a 10% stake in BCCL through an IPO. Encouraged by the strong investor response and market performance, the company now plans to sell its remaining 15% stake in BCCL over the next six months, Moneycontrol reported citing sources.
This comes as market regulator SEBI mandates that all listed companies must maintain a minimum public shareholding of 25%. Its rule further adds that newly listed companies must reach 25% public shareholding within 3 years of listing.
CIL will reportedly watch market conditions closely and aim to maximise value before going ahead with the next round of stake sale. The move is part of a broader strategy to unlock value from both its coking coal and non-coking coal assets.
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Notably, BCCL made a strong debut on the stock exchanges on Monday, January 19. The shares were listed at ₹45 apiece, nearly 96% higher than the IPO issue price of ₹23.
Investor interest in the IPO was exceptionally high. The issue was subscribed nearly 147 times during the bidding period from January 9 to January 13. Demand was led by qualified institutional buyers (QIBs), whose portion was subscribed over 310 times. Non-institutional investors (NIIs) subscribed over 258 times, while the retail investor category was subscribed around 49 times.
The IPO was fully subscribed within minutes of opening and also saw strong participation from anchor investors, with the company raising over ₹273 crore from them ahead of the public issue.
However, after the listing, the stock witnessed some profit booking. On the NSE, BCCL shares slipped to an intraday low of ₹40.22, while on the BSE they fell to ₹40.17, though prices remained well above the IPO level. Despite the post-listing decline, the company’s market capitalisation stood at about ₹21,054 crore.
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Meanwhile, CIL is also preparing to take another subsidiary to the markets. The company is expected to begin investor roadshows for Central Mine Planning and Design Institute (CMPDI) in February, with plans to launch its IPO by March, according to the report.
The CMPDI IPO is likely to be an offer-for-sale, similar to BCCL’s listing, with CIL initially planning to divest around 10-15% stake in the subsidiary.