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Coal India

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Coal India IPO - The Mother of All IPOs

Abstract:Coal India Limited (CIL), a Navratna PSU and the largest coal producing company in the world, came up with an Initial Public Offering (IPO) in October 2010, the biggest in the history of the Indian stock market. The IPO sought to raise funds close to INR 1,500,000 million by selling 631.63 million equity shares.

Prior to this, the Reliance IPO had been the biggest IPO ever. The price band of the IPO was fixed at INR 225-245. Though the response from various stakeholders to this price band was divided, the issue was highly successful in terms of the response from investors and was oversubscribed by 15.28 times.

The highest oversubscription, at 25.4 times, came from non-institutional investors. CIL was listed on November 4, 2010. In keeping with expectations, it was listed at a price of INR 287.75 and closed at a price of 342.35 on the BSE with the huge turnover of INR 63,241 million proving its tremendous success.
Introduction:In October 2010, Coal India Limited (CIL), the largest coal producing company in the world, came up with the biggest ever Initial Public Offering (IPO) in the history of the Indian stock market to raise funds close to INR 1,500,000 million. CIL, given an IPO grading of 5/5 , offered 631.63 million equity shares through the IPO. Prior to this, Reliance Power Limited had been the mega IPO in the Indian stock markets, raising INR 115,000 million in 2008 by selling 260 million shares. In June 2007, real estate giant DLF came up with a very big IPO to mobilize funds worth INR 96,000 million through a sale of 175 million shares.
The main objective of the CIL issue was to raise funds for the Government of India (GoI) to meet its disinvestment targets. A number of proposed thermal power plants were to be set up in the country in the next four years and this was expected to increase the demand

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