Robust demand from all classes of investors saw Coal India's mega initial share sale offer being oversubscribed 15.20 times on the final day of the issue today, generating bids worth Rs 2,35,290 crore.
The IPO, which opened on October 18, garnered total demand for over 960.36 crore shares, as against 63.16 crore equities on offer as per data from the National Stock Exchange valid till 1800 hours.
This translated into total demand worth Rs 2.35 lakh crore -- the highest upfront payment for any IPO in the country.
"The response to Coal India's IPO from all the classes of investors has surpassed even the most optimistic predictions. It has caught even the biggest optimists by surprise," SMC Global Securities Strategist Jagannadham Thunuguntla said.
While a break-up of investor demand was not available on the NSE website, merchant banking sources told PTI that the category reserved for retail investors was over-subscribed two times. In the high net-worth individual segment, the offer was oversubscribed 25.4 times.
The issue, through which the Centre aims to raise up to Rs 15,400 crore, closed today, but the final figures will be updated late at night, as applications from retail investors were still being counted, sources said.
Bidding by qualified institutional buyers (QIBs) for the issue closed yesterday. Today was the last date for bidding by retail and non-institutional investors. The shares reserved for qualified institutional buyers were oversubscribed 24.70 times.
Analysts said the huge response to the CIL issue will boost the government's disinvestment plans and will help speed up stake-sale projects in the coming days.
Finance Minister Pranab Mukherjee said huge demand for the CIL offer shows investor confidence in premier Indian companies.
Coal Minister Sriprakash Jaiswal also said the kind of response CIL has received shows the confidence of investors in the India growth story.
"Huge participation from foreign institutional investors as well as retail buyers shows high confidence in the world's largest coal producer (CIL)," Jaiswal told PTI.
Banking sources said almost all big international and domestic fund houses have bid for the issue. State-run LIC has put in bids worth Rs 13,000 crore, market sources said on the condition of anonymity.
The government is disinvesting a 10 per cent stake in the world's largest coal producer. The issue is priced in the range of Rs 225 to Rs 245 a share.
Analysts said that going by the demand for CIL's issue, the government may fix the issue price at the upper end of the price band.
The issue price will be decided by a Group of Ministers on October 24. The Navratna company is expected to list on the domestic bourses by November 4.
However, as expected, the portion of the issue reserved for CIL employees was under-subscribed. Sources said till 1800 hours, the IPO was subscribed just 10 per cent in the segment earmarked for employees.
Coal India had earlier said this portion might not get fully subscribed due to opposition from trade unions.
"The issue saw huge participation from investors as they judged that it is good opportunity to get a stake in the firm at a reasonable price," Enam Securities Managing Director Srinavasan Subramanian said.
Enam is one of the book running lead managers to the IPO. Other merchant banks to the issue are Citigroup Global Markets India, Deutsche Equities, DSP Merrill Lynch, Kotak Mahindra and Morgan Stanley India. Adfactors PR is the communication manager to the mega issue.
"The IPO is a blockbuster and shows investor appetite and confidence for a public sector undertaking," Kotak Investment Banking Executive Director and Head of Euity Capital Markets V Jaya Sankar said.
