Tuesday, August 31, 2010

Coal India IPO - Analysis, Recommendation, Subscription, Allotment, Listing

Analysis:
Coal India Limited, world's largest coal producing company will open its initial public offering (IPO) for 63.16 crore equity shares, which was an offer for sale by the President of India, acting through the ministry of coal, Government of India.

The offer shall constitute 10% of the post offer paid-up equity share capital of company. The issue will open on October 18 and will close on October 21. The company has decided the price band of Rs 225 - 245. Employees and Retail investors will get 5% discount to the issue price.

The company will not receive any proceeds from the offer and all proceeds will go to the selling shareholder - Government of India, whose stake will be 89.99% post issue.

For the year ended March 31, 2010, CIL has reported net profit of Rs 9,622.45 crore on total income of Rs 52,592.29 crore.

Book running lead mangers to the issue are Citigroup Global Markets India Private Limited, Deutsche Equities (India) Private Limited, DSP Merrill Lynch Limited, ENAM Securities Private Limited, Kotak Mahindra Capital Company Limited and Morgan Stanley India Company Private Limited.

Recommendation:
We would recommend this IPO for long term investment. Some of the recent IPOs had poor listing with stock markets being at high. So,be prepared for less or no listing gains but definately a good addition to portfolio from a long term perspective.

Subscription:
Coal India IPO has got 15.4 times subscribed. At the close of the IPO,
QII segment got subscribed 24.7 times
NII segment got subscribed 25.4 times
Retail segment got subscribed 2.15 times
Employee reservation segment got subscribed 0.04 times

Allotment:
Click here to check if you have been alloted Coal India shares!

Listing:
Coal India got listed on November 4th. Coal India had a superb listing and turned out to be a Diwali gift for investors. The stock listed at Rs 324.95 against issue price of Rs 245 before closing the day at Rs 342.35. Retail investors received 199 shares in allotment, which gave returns of Rs 92 per share upon listing, taking total profit to Rs 18,308 (at Rs 324.95 a share because of 5% discount for retail investors).


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