+------------------------------------------------------------------------------+
Coal India Sale Enters Last Day With $38 Billion of 'Hard Cash'
2010-10-21 04:19:53.864 GMT
By Ruth David and Natalie Obiko Pearson
Oct. 21 (Bloomberg) -- Coal India Ltd., the world's biggest
producer of the fuel, began the last day of its initial share
sale with at least 1.68 trillion rupees ($38 billion) of bids.
Investors offered to buy almost 7.5 billion shares, or 11.9
times the 631.6 million shares on offer, according to data on
the National Stock Exchange's website as of 8 p.m. local time
yesterday. The shares are on sale for 225 rupees to 245 rupees
apiece. Only retail investors can bid today.
"This gives you the confidence that an Indian deal can
attract up to $50 billion in demand," said Dharmesh A. Mehta,
managing director for institutional equities at Enam Securities
Pvt. The investment bank is managing the transaction along with
Citigroup Inc., Deutsche Bank AG, Bank of America Corp., Kotak
Mahindra Capital Co. and Morgan Stanley.
Investors have flocked to the offering on expectations that
Coal India stands to benefit from surging energy demand in
India, where 56 percent of power is generated from the fuel,
according to August data from the Central Electricity Authority.
The government aims to boost power generation 13-fold by 2030 to
sustain growth in Asia's second-fastest growing major economy.
The sale of the 10 percent stake in Coal India, through
which the government aims to raise as much as 151.5 billion
rupees, is set to top the 116 billion rupees initial public
offering by billionaire Anil Ambani's Reliance Power Ltd. in
January 2008.
Mutual funds and institutional investors were allowed to
bid for Coal India shares from Oct. 18 until yesterday evening.
Margin Money
"This is hard cash, compared to the last record IPO, when
institutional investors only had to put in 10 percent as margin
money," Mehta said by phone from Mumbai. The capital markets
regulator in May began requiring bidders to put up their entire
application money upfront.
The share sale may help the government meet about 38
percent of the 400 billion rupees target it set to raise by
selling shares in state-run companies in the year ending March
31 to trim the budget deficit.
Overseas investors have bought a record 1.08 trillion
rupees of Indian equities this year, pushing the benchmark
Sensitive Index earlier this month to its highest level in 2 1/2
years.
The Coal India offering cements Kotak Mahindra's No. 1
ranking in managing initial share sales in India in 2010, with
Enam Securities as No. 2, in a year in which Indian IPOs have
raised 179 billion rupees, according to data compiled by
Bloomberg.
For Related News and Information:
Top energy stories: ETOP <GO>
Energy stories from India: TNI INDIA NRG BN <GO>
Top news from India: TOP IN <GO>
Today's most active securities: MOST <GO>
Initial share sales: IPO <GO>
Coal India's financial data: COAL IN <Equity> FA <GO>
Environmental markets: GREE <GO>
Most-read India news: MNI INDIA 1W <GO>
--Editors: Chitra Somayaji, James Gunsalus
To contact the reporters on this story:
Ruth David in Mumbai at +91-22-6633-9017 or
rdavid9@bloomberg.net;
Natalie Obiko Pearson in Mumbai at +91-22-6612-9107 or
npearson7@bloomberg.net
To contact the editor responsible for this story:
Clyde Russell at +65-6311-2423 or
crussell7@bloomberg.net
