The government is considering not roping in anchor investors for Coal India's forthcoming IPO in the face of the overwhelming response from investment firms like USS, Norges Bank and Capital Research.
"There is a huge response from institutional investors for the Coal India IPO. Even the issue managers like Citi, Deutsche Bank, BoFA-Merrill Lynch are pushing for their own contracts to be the anchor investors. The development, may see government and CIL deciding against roping in anchor investors for the issue," a person in-the-know of the development said.
The pre-IPO roadshow team, comprising officials from the Department of Disinvestment, Coal India, Coal Ministry and lead managers, was in London on September 10, where they met six major investors-- USS, Norges Bank, Capital Research, F&C Investment Management, Brevan Howard, Nevsky Capital.
The government expects to raise up to Rs 12,000-15,000 crore through Coal India public issue, billed as the country's largest ever.
The officials, who left India on September 4, have been to Sydney, Hong Kong, Singapore and London to attract global investments for the public issue, billed to be the largest in India till date. From August 31 to September 3, the team was wooing Indian investors for the issue.
"The team is now in New York. They will go to two other US cities -- Boston and Los Angeles -- before heading back to India later this week," the official said.
The Book Runners and Lead Managers (BRLMs) to the issue, including Enam, Kotak Investment and Morgan Stanley, are upbeat on the mega issue, which has been dubbed, "Project Black Diamond," the official added.
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"The government will decide on appointing anchor investors in mid-September. A group of ministers may be constituted to take the final decision," a senior coal ministry official said.
Anchor investors are those investors who buy shares of the company before the launch of the public issue. The concept of anchor investors was approved by Sebi last year.
Anchor investors, who cannot be a promoter of the issuer company, can be allocated as much as 30 per cent of the portion reserved for qualified institutional buyers. Such investors must bid for at least Rs 10 crore worth of shares.
The PSU's 4-day public issue is slated to take off on October 18. As per the Draft Red Herring Prospectus filed by the company with Sebi in August, it has offered 631,636,440 equity shares with a face value of Rs 10 each.
Sources had said the government is looking to raise between Rs 12,000 crore and Rs 15,000 crore from selling its 10 per cent of the stake in the firm through the public issue At present, the government owns a 100 per cent stake in the company.