Shares of Bharat Coking Coal Ltd. (BCCL) declined up to 5% on Monday as investors booked profits following a blockbuster market debut. The stock had listed at a sharp premium of nearly 97% over its issue price, triggering early selling pressure soon after trading began.

In case you didn’t know, BCCL, a company that is completely owned by Coal India Ltd., appeared on the stock market of the NSE and BSE after a super successful initial public offering of Rs 1,071-crore. The IPO, which was only an offer for sale by Coal India, was subscribed about 147 times indicating a strong demand from retail, institutional and high-net-worth investors.

After BCCL shares were listed at approximately Rs 45 on the stock exchanges as compared to an issue price of Rs 23, the stock fell to 9% at its lowest point of the day before recovering. Market participants attributed the fall to short-term profit booking following the steep listing gains.

Strong fundamentals, short-term volatility

Ahead of listing, the IPO had commanded a grey market premium (GMP) of about 52%, indicating robust investor interest and the scarcity value of a pure-play coking coal producer in India.

Brokerages remain largely constructive on the company’s long-term outlook. SBI Securities highlighted BCCL’s dominant position, noting that it contributes nearly 58.5% of India’s domestic coking coal production and holds estimated reserves of 7.91 billion tonnes. The brokerage had recommended subscribing to the IPO at the cut-off price.

Lemonn Markets Desk described the listing as a strategic step to unlock value for Coal India shareholders, citing BCCL’s monopolistic positioning and strong demand visibility from India’s steel sector.

Meanwhile, Anand Rathi Share and Stock Brokers had assigned a “Subscribe” rating primarily for listing gains, cautioning that while fundamentals remain strong, valuations at the upper price band could limit near-term upside.

About the company

Bharat Coking Coal operates 34 mines across the Jharia coalfields in Jharkhand and the Raniganj coalfields in West Bengal. It also runs multiple coal washeries and is expanding washing capacity to improve coal quality and realisations. Backed by Coal India’s scale and expertise, BCCL plays a critical role in reducing India’s dependence on imported coking coal for steel production.

Buy, sell or hold?

Analysts suggest that while short-term volatility may persist after the sharp debut rally, long-term investors could consider holding the stock, given its strategic importance, strong reserve base and linkage to India’s infrastructure and steel growth. Traders, however, may continue to see swings as the market digests the valuation post-listing.