The biggest public issue ever in India opened with reasonable success with 38% of the over Rs 15,000 crore issue of Coal India Ltd (CIL) being subscribed on day 1 of the issue opening.
As expected the early rush of investors putting in money to subscribe to the issue is institutional investors with almost two thirds of the total QIB segment of the issue being subscribed within hours of the issue opening led by FIIs. QIB portion subscription closes before the issue closes for retail shareholders.
Non institutional investors comprising HNIs among others subscribed to a third of the maximum shares reserved for them. Retail investors bought just about 12% of the portion reserved for them and despite all the brouhaha about employees(including blue collared) around the country rushing to open demat accounts just about 0.2% of the employee portion was subscribed on day 1.
Interestingly, the stock market played true to analyst fears that a huge issue like Coal India will see investors moving money from secondary market to pick shares of the state-owned coal producer that has apparently left enough room for listing day gains. The 30-stock benchmark index Sensex traded down 1% and falling below the psychological mark of 20,000 in mid day only to bounce back and close 0.2% above the previous day.
A navratna company Coal India is the world’s largest coal producer with over double the reserves compared to the second largest coal firm US-based Peabody Energy. It accounts for around 82% of India’s total coal production and the government that owns 100% stake as of now, is looking to raise up to Rs 15,475 crore ($ 3.4 billion) by selling 10% stake as part of its disinvestment programme to raise money for reducing fiscal deficit.
At the upper end of the price band the company will be valued around Rs 1.54 lakh crore ($34.7 billion), making it the seventh most valued firm in the country, behind Reliance Inds, ONGC, SBI, TCS, Infosys and NTPC.