Coal India rockets on debut
Nov 05, 2010
The Hindu Business Line, Kolkata
Mumbai, Nov. 4
On a day the Sensex closed at its all-time high, the 14 th public sector enterprise to be listed, Coal India debuted at a hefty premium, closing almost 40 per cent over its issue price on the bourses.
Coal India shares, which listed on Thursday, opened at Rs 287.75, up 20 per cent from the issue price of Rs 245 a share on the BSE.Market-men said that this is the best listing of any public sector enterprise and also made for the biggest gain on listing for any large company so far this year.
“It was a historic day not only for Coal India, but for the whole Indian capital market. We are happy with the listing and expect the stock to outperform expectations,” said Mr P.S. Bhattacharyya, Coal India's Chairman, during the listing ceremony at BSE on Thursday.
After today's listing, the market capitalisation of the company stands at Rs 2.16-lakh crore. Coal India is now the fourth largest listed company on the Indian bourses (the top three are Reliance Industries, ONGC and SBI). Coal India's (though not yet in the Sensex) market cap is equal to nearly 7 per cent of the total market cap of the Sensex as on Thursday, which was Rs 31.15 lakh crore. (The total market capitalisation of all the BSE listed companies was Rs 76.87 lakh crore.)
“There was strong demand from all categories of investors for Coal India shares today. Due to the high oversubscription that the IPO received, there is a lot of unsatisfied or latent demand for shares as investors have received just a fraction of the shares they had applied for.
“There has been strong demand from long-term investors such as insurance companies, pension funds, etc. Investors are convinced about the long-term fundamentals of the company. Typically one does not expect such premiums during listing,” said Mr V. Jaya Sankar, Executive Director and Head of ECM, Kotak Investment Banking.
Reliance Power's IPO, the largest issue before that of Coal India, opened at a premium on listing day but ended the day in the red. It was also the day when the Sensex tanked more than 1,000 points during intraday trade (February 11, 2008).