CIL to file final papers for IPO tomorrow, board clears RHP

CIL to file final papers for IPO tomorrow, board clears RHP

New Delhi: State-run Coal India Ltd’s board has cleared the final papers for its upcoming mega initial public offer (IPO) and will submit them to market regulator Securities and Exchange Board of India (Sebi) on Monday.

The IPO, through which the government aims to garner about Rs15,000 crore, is billed as the country’s largest issue ever and is likely to take off on 18 October.

“CIL’s board has cleared the red herring prospectus (RHP) on Saturday and it will be submitted to market regulator Sebi tomorrow," a source close to the issue told PTI.

Capital market regulator Sebi last week cleared the draft papers for Coal India Ltd’s IPO, paving the way for the government-run coal giant to file a red herring prospectus.

“DRHP was based on March quarter financial results, while the RHP has been updated with June quarter accounts," he said.

Sebi had suggested 78 changes in the draft papers and the state-run coal major has incorporated all these amendments in the final papers, he added.

With an aim to attract more funds from high net-worth and retail investors, CIL plans to reserve one day of the issue exclusively for them. The book building for qualified institutional buyers (QIB) will close one day prior to the bid closing date, Coal India Ltd chairman Partha S Bhattacharyya had said last week.

This model, in which one day is reserved for retail and high net-worth individuals, helped several companies that recently hit the capital market with their offers attract more participation from non-institutional investors.

The same model was followed in the recently concluded public offers of SKS Microfinance, Bajaj Corp and state-run Engineers India Ltd, with a huge response in the retail and high net-worth individual categories.

An empowered group of ministers (EGoM) working on the CIL IPO will meet by this month-end to decide on the anchor investor issue. It will meet again on 12 October to decide the price band of the shares being offered, Bhattacharyya had added.

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 with a face value of Rs10 each.