CIL IPO to stay open a day longer for HNI, retail investors

CIL IPO to stay open a day longer for HNI, retail investors

New Delhi: With an aim to attract more funds from high networth and retail investors, Coal India on Friday said its mega initial public offer will stay open for them a day longer than institutional buyers.

The book building for qualified institutional buyers will close one day prior to the bid’s closing date, state-owned Coal India Ltd chairman Partha S Bhattacharyya told PTI.

The PSU’s 4-day public issue is expected to take off on 18 October.

This model (entire one day for retail and high networth individuals) helped several companies, which hit the market with their offers recently, attract more participation from the non-institutional investors.

The model was followed in the recently-concluded public offers of SKS Microfinance, Bajaj Corp and state-run Engineers India Ltd, where a huge response was seen from retail and high networth individual categories.

An Empowered Group of Ministers (EGoM) working on CIL IPO, which garner up to 15,000 crore, would meet by this month-end to decide on the anchor investor issue and on 12 October on the price band of the shares being offered, Bhattacharyya added.

He further said final papers (red herring prospectus) for the initial public offer will be considered on 25 September when the coal giant’s board will meet.

Capital market regulator Securities and Exchange Board of India this week cleared the draft papers of Coal India Ltd’s IPO, paving the way for the government-run coal giant to file red herring prospectus.

The regulator had asked the coal major to file the final papers (RHP) with a few more details.

Coal India had filed its draft red herring prospectus on 9 August this year.

As per the Draft Red Herring Prospectus (DRHP) filed by the company with Sebi, CIL will offer 631,636,440 shares of face value of 10 each.

The government expects to raise up to 12,000-15,000 crore through Coal India public issue, billed as the country’s largest ever. Anil Dhirubhai Ambani Group firm Reliance Power, in January 2008, raised 11,500 crore through IPO—the biggest in India till date.

The government is diluting its 10% stake in CIL through this issue.

At present, the government owns a 100% stake in the company.

The coal major is offering a discount of 5% on issue price of IPO to its employees and retail buyers, Bhattacharyya added.

Citigroup Global Markets India, Deutsche Equities (India) Private, DSP Merrill Lynch, Enam Securities, Kotak Mahindra Capital and Morgan Stanley are the book running lead managers to the issue.