New Delhi, Oct. 25: The government today fixed Coal Indias mega IPO price at Rs 245 per share, the upper end of the initial offer price band.
This is expected to fetch the government over Rs 15,000 crore from the sale of about 63.16 crore shares in the coal miner. The government is offering a 5 per cent discount on the price to retail investors.
The issue price has been fixed at Rs 245 per share. The government will raise over Rs 15,000 crore
It was a grand success, coal minister Sriprakash Jaiswal said after a meeting of the empowered group of ministers, headed by finance minister Pranab Mukherjee.
Besides Jaiswal and Mukherjee, home minister P. Chidambaram and Planning Commission deputy chairman Montek Singh Ahluwalia attended the meet to fix the price.
Coal India is expected to list on the bourses on November 4, a day before Diwali. The share is expected to trade at a premium on the first two days as it is traditional for brokers and retail buyers to be bullish in the run-up to the festival.
Coal India reported an earning per share of Rs 15 for 2009-10 and todays decision pegs its share value at 15.7 times its EPS.
Analysts do not see much scope for a huge immediate spike in the price; however, some believe that prices will jump on listing as sentiments are in Coal Indias favour.
The state-run miners offer, which closed on October 21, was subscribed 15.28 times.
Deutsche Equities (India) Private, DSP Merrill Lynch, Enam Securities, Citigroup, Kotak Mahindra Capital and Morgan Stanley were among the book-running lead managers.
Coal India, which accounts for nearly 80 per cent of Indias coal output, expects to increase its profitability because of higher energy prices and Indias dependence on coal fired power for the next few decades. Coal demand is expected to rise 11 per cent annually for the next 10 years.
Last year, Coal India produced 431 million tonnes of coal, or 82 per cent of Indias total coal output. The coal miner also controls about 53 billion tonnes of proven coal reserves in the country.
Disinvestment ministry officials said the mega share sale would be followed by offerings by SAIL, ONGC, MOIL, PowerGrid, Hind Copper, Shipping Corporation and IOC this fiscal.