A decision on anchor investors for the initial public offering (IPO) of Coal India (CIL), the country's largest coal miner, could be taken in the next few days, as the government readies the firm for the bourses as part of its divestment plan to raise up to Rs 40,000 crore this fiscal.
“It will be decided in two or three days,” coal minister Sriprakash Jaiswal said here today, when asked whether the government would consider looking at anchor investors from outside India.
Anchor investors — whose entry in public issues through book building was allowed by the Securities and Exchange Board of India (SEBI) only last year — can be allotted up to 30 per cent out of the portion available for allocation to Qualified Institutional Buyers. As per the SEBI guidelines, the minimum application size by an anchor investor shall be Rs 10 crore, bidding of which will open a day before the issue opens and should be completed on the same day.
Further, allocation to anchor investors shall be on a discretionary basis subject to minimum number of two investors for allocation of up to Rs 250 crore and five investors for allocation of more than Rs 250 crore.
“We will be able to get big investors easily through this route, instead of seeking out a large number of smaller investors. Unlike other PSUs (public sector undertakings) who did not employ this option, we should be in a position to take advantage of the situation,” a CIL official said.
Angel Broking analyst Rupesh Sankhe felt that bringing in anchor investors would aid the price discovery process, apart from augmenting market confidence in a period when PSU divestments have met with tepid response from retail investors.
The CIL IPO, slated to be the biggest to hit the market since Reliance Power went to the market in 2008, is expected to raise up to Rs 15,000 crore from government's 10 per cent stake sale.
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As of now, the government holds 100 per cent equity in the miner. Last week, CIL filed its draft red herring prospectus (DRHP) with SEBI, to get the ball rolling for the issue that is likely to open on October 18 and close on October 21.
Meanwhile, Jaiswal indicated that he was optimistic about an early resolution of the ongoing tussle between the coal ministry and the ministry of environment and forests (MoEF).
“I don't think there will be more hurdles with (regard to) environment. I don't think more than 10-15 per cent area will be (designated) no-go,” he said. Last month, CIL officials had said that the MoEF, after making assessments, had identified about 48 per cent area as 'no-go' across nine coal fields.