CIL IPO nets Rs 1,20,000 cr from FIIs

Coal India Ltd IPO has attracted a whopping inflow of about Rs 1.20 lakh crore from FIIs, more than the record Rs 1.08 lakh crore (about $24 billion) they have invested in the Indian stocks so far this year.

Although about 90 per cent of the funds are estimated to flow back after the IPO is over, the inflows have been impacting forex as well as the stock markets.

Sensex has fallen since the public offer opened on October 18 as CIL issue diverted funds from other equities, while the rupee has strengthened.

The state-owned Coal India Ltd's (CIL) initial public offering (IPO) is the country's biggest share sale so far, with the government looking at garnering up to Rs 15,400 crore by selling 10 per cent stake in the world's largest coal producer.

Bidding for the mega IPO closed yesterday for qualified institutional buyers, which includes the foreign institutional investors, mutual funds and insurance firms. And for the portion reserved for them, the issue was oversubscribed by as much as 24.70 times.
    
The IPO, priced in a band of Rs 225-245 per share, closes today for retail and non-institutional buyers. Overall, the issue has been oversubscribed 12.18 times (till 12:00 pm) as per the data available with the NSE.

The IPO has attracted a demand of 493,38,72,050 shares from FIIs. Calculated at the upper end of the IPO price band, this demand is valued worth Rs 1,20,879.86 crore and at the lower end worth Rs 1,11,012.12 crore.

Even at the low end, the inflows are higher than what FIIs have infused -- Rs 1,08,379.60 crore during the entire year so far. This year's inflow of Rs 1.08 lakh crore ($23.77 billion) is the highest ever investment made by FIIs in a single year.

The huge FII inflow for the CIL issue has surprised many analysts, who were expecting around Rs 70,000 crore to come in from this segment.

Money/forex market dealers were expecting some temporary volatility or strength in the currency during this period.

The Indian rupee appreciated by another 4 paise to Rs 44.30, against the US Dollar at the Interbank Foreign Exchange market in the morning trade today on the back of strong FII inflows, and appreciating Asian currencies against dollar.

Foreign investment in the Indian stock market crossed the magic Rs 1 trillion-mark ($22 billion) for the first time in history last week and analysts have predicted the overseas inflows will continue to increase in the coming months.

"India is well on the path of reverting to its high- growth orbit in the current uncertain global environment. Thus, India would continue to attract global fund inflows, driven by its resilient domestic economy," brokerage firm Angel Broking said in a note.