Government fixes Coal India IPO price at Rs 245 per share

The Government has decided to fix the price of the Coal India Ltd (CIL) initial public offering (IPO) at Rs. 245 per share, which is the upper limit of the price band, in view of the overwhelming response received by the public offering.

“ Qualified institutional buyers (QIBs) for whom there was a reservation of 50 per cent of the shares had oversubscribed by as much as 24.7 times. They had put in bids of a phenomenal Rs. 1,72,000 crore. In the retail segment 16.45 lakh applications were received, which is the highest amongst the PSU IPOs so far,” coal minister Shri Prakash Jaiswal said.

“ The amount flowing in is more than over Rs. 11,000 crore. This is also the highest so far in the Indian capital market and will enable it to rake in Rs. 15,200 crore,” the minister added.

The amount of Rs. 15,200 crore mopped up from the IPO will form part of the targeted Rs. 40,000 crore income from the government’s disinvestment programme.

These funds will be utilised for infra and development programmes in the rural areas. “ It is unfortunate that the workers were not allowed to participate as the trade unions could not purchase the shares as the politics of the trade union leaders came into play,” he said.

CIL chairman Partha S. Bhattacharyya said, “ The company has a war chest of Rs. 6,000 crore for making equity investments in three overseas firms.” CIL is looking at companies in Australia, Indonesia, S. Africa and the US. He said three coal mining firms in these nations were under consideration but refused to share any details due to the confidentially clause in the negotiations.

The minister said the fact that CIL is the holder of the world’s largest coal reserves and largest producer, is one of the lowest- cost coal mining firms with a professional management aiming at a high growth trajectory both in projection and profits, was appreciated by investors globally.