Coal India IPO price fixed at Rs 245

Issue to fetch over Rs 15,100 crore for the govt; shares likely to list on Nov 4.

The government on Monday fixed Coal India’s (CIL’s) initial public offer (IPO) price at Rs 245 per share, the upper end of the range.

The government will fetch Rs 15,100 crore by selling 631.6 million shares, or 10 per cent stake, at Rs 245 per share. It will offer retail investors a discount of five per cent.

“The issue price has been fixed at Rs 245 per share. The government will raise over Rs 15,000 crore,” Coal Minister Sriprakash Jaiswal said after a meeting of the empowered group of ministers (EGoM), headed by Finance Minister Pranab Mukherjee. “It was a grand success,” Jaiswal added.

Besides Jaiswal and Mukherjee, Home Minister P Chidambaram and Planning Commission Deputy Chairman Montek Sigh Ahluwalia were also present at the EGoM.

The company is expected to list on stock exchanges on November 4, a day before Diwali. CIL’s IPO, which closed on October 21, was subscribed 15.17 times, and mopped up Rs 2.35 lakh crore.

Marketmen said the stock would open at a fairly good premium. “CIL deserves to trade at a premium to global coal peers, given much lower volatility in earnings and a large headroom to raise prices in a supply-deficit environment,” brokerage house CLSA said.

CIL is one of the largest companies in the world, based on coal reserves of 64,786 million tonnes in April. “Going by the significant asset size, the quality and the life of the reserves and the dominance in domestic market, we believe CIL has very good prospects in the long term,” Elara Securities analyst Ravindra Deshpande said.

Analysts said the huge response to the issue would boost the government’s disinvestment plans and speed up the upcoming stake-sale projects.