Coal India IPO - The Mother of All IPOs
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Code : INB0012
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Region : India
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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 for coal by 11.2%. CIL being the dominant player in the coal industry of India met almost 53% of the nation's coal requirement. The main advantage that CIL enjoyed as compared to international players was its cost competitiveness with almost 90% of its production coming from low cast mines and also its stripping ratios were low - as a result of which the prices notified by CIL were very low compared to the prices of imported coal (adjusted for calorific value). |
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