CIL's mega IPO subscribed 34% on Day 1

Coal India's (CIL) Rs 15,000-crore mega initial public offer (IPO), the country's largest public issue so far, got demands for 34 per cent of shares on offer on the first day today.

The issue received maximum demands from institutional buyers, which include FIIs, insurance firms and mutual funds. In the portion reserved for them, the initial public offering was subscribed 63 per cent, as per the National Stock Exchange (NSE) data.

In high networth individual category, the issue generated demands for 18 per cent of shares on offer. In retail portion, it was subscribed 10 per cent, the data showed.

In total, the issue attracted bids for 21.3 crore shares against 63.1 crore equities on offer. The demand received on the first day is valued at Rs 5,230.41 crore at the upper end of price band.

The issue is priced in the range of Rs 225 to Rs 245 per share. The government is divesting 10 per cent stake in CIL -- the world's largest coal producer -- through this issue.

The offer closes on October 21. For institutional buyers, the IPO will close on October 20.

Primary market analysts believe participation from retail investors will pick up in the last two days, as they usually follow the trend of institutional investors. Besides, there is one additional exclusive day reserved for them (October 21).

A recent provision by the market regulator Sebi made it mandatory for 100 per cent upfront payment by QIBs is also a reason behind low participation by the institutional investors on the first day, they said.

"Most of the money, for investment in such big issue, is borrowed by banks and in such a scenario big buyers prefer to make bid on second or third day to avoid interest burden," SMC Global Securities Strategist Jagannadham Thunuguntla said.

At the upper end of price range, Coal India public issue is worth Rs 15,475 crore and at the lower end it would fetch about Rs 14,211.81 crore.

The navratna company is expected to list on the domestic bourses by November 4.

Anil Ambani Group company Reliance Power's public issue, which mopped up Rs 11,500 crore in January 2008, remains India's biggest IPO till date.

Incorporated in 1973, CIL is the largest coal producer and coal reserve holder in the world, contributing 82 per cent of total coal production in India.

Citigroup Global Markets India, Deutsche Equities India, DSP Merrill Lynch, Enam Securities, Kotak Mahindra Capital and Morgan Stanley India are book running lead managers to the CIL IPO.