Coal India's initial public offer (IPO), the country's largest, attracted bids worth nearly Rs 1.81 lakh crore till the second last day of the bidding period on Wednesday. While today was the last day for institutional bidders to put in their bids, retail and high net worth individuals (HNIs) have a day more to submit their applications in the offer that intends to raise over Rs 15,000 crore (Rs 150 billion).
According to data available with the National Stock Exchange (NSE), the IPO has been subscribed 11.64 times, with bids received for 7,354.47 million shares, as against 631.64 million shares on offer in the price band of Rs 225-245.
Reports showed the institutional segment was subscribed approximately 25 times, while retail and HNIs portions were subscribed 0.8 times and 1.4 times, respectively.
Market participants say foreign institutional investors have put in large bids to buy shares of the world's largest coal company by production.
Domestic institutions, which have been on a selling spree in the secondary market, have also shown immense interest.
Coal India has turned out to be a watershed event, with retail investors queuing up in large numbers. Prior to the opening of the issue, there were doubts of there would be enough applications in the retail segment.
In the recent past, many large issues, including government ones, have got a subdued response from small investors. In case of Coal India, the retail segment was subscribed 10 per cent on the first day itself, unheard of in most offerings, where small investors wait for cues from institutional entities before taking a call.
"Coal India has clearly shown that if the company and the pricing are good, retail investors will come," says Prithvi Haldea, managing director, PRIME Database. "People were talking that the Rs 1 lakh limit is small for retail investors. Coal India has proved them wrong," he said.
The appetite for the issue among HNIs can be gauged from the significant rise in the quantum of margin financing by the non-banking finance arms of brokerages and investment banks.
Meanwhile, the premium for the stock in the grey market rose on Wednesday from Rs 26 to Rs 34 per share over the upper end of the price band.
"People are ready to apply based on leveraged finance and are pretty sure about the returns," said the head of the portfolio management division of a foreign outfit.
"For leveraged HNIs to make money, there has to be 25 per cent appreciation after listing. While many find this a bit too ambitious, one can never be sure given the kind of frenzy that is there," he said on condition of anonymity, as his investment banking arm is one of the lead managers to the issue.
