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Jharia Coalfield Taps Methane Goldmine
12 Jan
Summary
- Two CBM blocks in Jharia coalfield tapped for energy.
- Jharia CBM Block 1 has estimated reserves of 25,000 million cubic metres.
- IPO timing favors stable cash flows and clear demand visibility.
Bharat Coking Coal is developing two coal-bed methane (CBM) blocks in the Jharia coalfield, a move poised to harness significant energy potential. Jharia CBM Block 1 alone boasts estimated reserves of 25,000 million cubic metres, with production anticipated to commence in FY28. The pre-feasibility report for the second block has already received approval as of October 2024.
The company's initial public offering (IPO) is timed strategically, aligning with current investor sentiment that favors businesses with stable cash flows and evident demand. As a public sector entity in a crucial energy segment, Bharat Coking Coal benefits from predictable offtake and a robust operational framework.
This IPO presents a valuation that offers reasonable comfort relative to its earnings. While the coal sector is subject to cyclical trends and regulatory oversight, these factors are largely understood and priced in. The offering is best suited for investors seeking stability or near-term listing performance rather than aggressive long-term growth.
