Coal India IPO - The Mother of All IPOs

Code : INB0012

Year :

Industry : Mining

Region : India

Teaching Note:Not Available

Structured Assignment :Not Available

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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.

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Pedagogical Objectives:

  • Understand the various ways of raising of capital by corporations
  • Examine the pricing issue involved in Initial Public Offerings
  • Aware about the difference between a public and a private issue
  • Understand the IPO in the context of Indian stock markets
  • Look at the IPO in the context of a PSU
  • Examine the pros and cons associated with the raising of capital through IPOs.

    Keywords : IPO; Valuation; GOI; DRHP; BRLM; PSU; Navratna; Retail Investor; Qualified Institutional Buyer; Sgares; PE

    Contents :
    Indian Coal Industry
    Company Background
    Issue Details of the IPO

    Case Introduction >>

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