Coal India IPO receives overwhelming response

The mega IPO of Coal India has been subscribed by more than 15 times as at 8 pm (IST) on Oct. 21, according to the NSE web site. The issue, the largest ever in the history of Indian capital markets, received bids for a staggering ~9.63bn shares as opposed to the 631.63mn shares on offer. The qualified institutional bidders (QIB) section was subscribed 24.7 times. The QIBs put in bids for a staggering 493.38 crore shares, compared with 28.42 crore shares reserved for the category. Bidding for the QIBs closed on Oct. 20.



The non-institutional category (HNI) portion got subscribed by 25.40 times while the retail portion was subscribed 2.25 times. The issue closed on Oct. 21 for the HNI and retail categories. Coal India had entered the capital market and had priced its IPO in the range of Rs. 225 to Rs. 245 a piece. The offer opened on Oct 16.

The shares of Coal India are scheduled to get listed on the BSE and NSE on November 4, a day ahead of Diwali. Hopefully, the market performance of Coal India on its debut will be as spectacular as the response to the IPO has been. The only sour aspect to the otherwise record-breaking Coal India IPO has been the lukewarm response to the employee quota. The employee portion was subscribed by just 0.09 times. Even the 5% discount failed to entice the Navaratna PSU company's staff mainly because of the opposition to the IPO from the trade unions. The 6.31mn shares reserved for Coal India's employees will now be reallocated to other investors.

Separately, reports suggested that stock market regulator SEBI has asked Coal India to offer all investors an exit option by Oct. 25 because the miner’s profit and loss account in the IPO document contained errors. The profit and loss statement showed that figures for accretion in stock and that of other income had been swapped, according to reports. The mistake was in the standalone statement and occurred because the documents were printed in a hurry, Mint cited A.K. Sinha, Coal India’s director of finance, was quoted as saying.