EGoM may fix upper price band for CIL IPO at Rs 240/ share

A ministerial panel headed by Finance Minister Pranab Mukherjee may tomorrow fix the upper price band for Coal India's (CIL) much-awaited mega IPO at about Rs 240 per share, a range which could help it raise over Rs 15,000 crore if the public offer is fully subscribed.

There are indications that the upper price band could be about Rs 240 a share, a person in the know of development told PTI. However, the final decision would be taken by the Empowered Group of Ministers (EGoM) which is meeting tomorrow.

"Post listing we will see Coal India shares trading at around Rs 250 to Rs 270 a share. So the price band for the IPO could be at a discount of 10 to 15 per cent from it," a market source said.

According to market sources, merchant bankers working on the issue are of the view that price band should be set in the range of Rs 220-Rs 240 per share to garner the maximum from the initial public offer (IPO), billed as the biggest ever to hit the Indian capital market.

Sources said the EGoM would also consider the share prices of major global coal companies including China Shenhua Energy Company, the world's most valuable coal producer.

"The GoM would take a view of the share price of the listed coal companies across the globe including China's Shenhua and compare their strengths with Coal India to arrive at a figure," the source added.

The government is diluting its 10 per cent stake in Coal India (CIL) through a public offer. At present, the government owns a 100 per cent stake in the company.

Citigroup Global Markets India, Deutsche Equities (India) Private, DSP Merrill Lynch, Enam Securities, Kotak Mahindra Capital and Morgan Stanley are the book-running lead managers for the four-day offer, which would start on October 18.

CIL filed the prospectus (Red Herring Prospectus) for the issue with Sebi after being cleared by the Registrar of Companies (ROC) in the last week of September, after its board cleared the revised papers incorporating 78 changes suggested by the market regulator.

The Coal behemoth will offer 631,636,440 shares with a face value of Rs 10 each.

The biggest IPO in India till date is that of Anil Dhirubhai Ambani Group company Reliance Power which in January, 2008, raised Rs 11,500 crore.