Coal India Limited, a Navratna PSU, is entering the capital markets with a public issue of 63 crore equity shares. This issue, slated to be the largest primary market offering in the history of the Indian Stock Markets, will garner around Rs. 15,000 crore.
Coal India is the world’s largest coal producing company, as well as the world’s largest coal reserve holder. The company has 471 mines across the country and manages over 80% of India’s annual coal demand.
Details of the issue:
Issue Open: Oct 18, 2010 – Oct 21, 2010.
Issue Size: 631,636,440 Equity Shares of Rs. 10.
Face Value: Rs. 10 Per Equity Share.
Issue Price: Rs.225 – Rs.245 Per Equity Share.
Listing At: BSE, NSE.
Fundamental Details:
For FY10, the company reported total income of Rs. 52,592 crore with net profit of Rs. 9,834 crore, resulting in an EPS of Rs. 15.5. Comparing with NMDC, around a P/E of 16-17, the announced price band of Rs.225-Rs.245, is a reasonably good price to invest for long term investors. A 5% discount offered for retail investors could add as an extra cushion factor. Investors can apply for this issue with a long term view and not for listing gains alone.
The price for this IPO hasn’t been fixed yet, The IPO will most likely open on the 18th October, and close on the 21st October.
These were some of the more interesting things I found in the prospectus that Coal India has filed for its IPO, and this is no way is a comprehensive review.
The price band has been fixed between 225-245, which is reasonable. Long term investors can apply for this issue.