TERM PAPER

OF
FINANCIAL INSTITUTION SERVICES
ON
“COAL INDIA IPO”

Submitted To: Submitted By:

Mr. Anoop Mohanty Praveen Kumar Pandala

Section: RS1904

Roll No.- RS 1904 B49

Reg. No. – 10907222

Subject code- MGT 523

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 TABLE OF CONTENT

Ø Introduction.
Ø Coal India IPO detail.
Ø Objective of the IPO.
Ø IPO snapshot.
Ø Capital structure.
Ø Bidding status (subscription detail) on the day to day basis.
Ø IPO listing detail.
Ø Subscription detail as per the investors.
Ø Day to day performance of the stock and share holder pattern.
Ø Peer group comparison.
Ø News related with the IPO.
Ø Conclusion.
Ø References.

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Introduction:

Coal India Limited (CIL) is an Indian state-owned coal company

headquartered in Kolkata, West Bengal, India and the world's largest coal miner with revenue
exceeding Rs 45,797 Cr or $10.3 billion U.S. (FY2008-09). It is owned entirely by the Union
Government of India, under the administrative control of the Ministry of Coal. It is involved
in coal mining and production industry.

Coal India Limited

Type State-owned

Industry Coal & Lignite

Founded 1975

Headquarters Kolkata, West Bengal, India

Key people Partha S Bhattacharyya, (Chairman)

Products Coal

Revenue ▲ 45,797 crore (US$10.3 billion) (2008-09)

Net income ▼ 2,079 crore (US$467.78 million)(2008-09)

Employees 397,138 (March 31, 2010)

Website Coalindia.in

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Coal India Limited was formed in 1975 as a holding company with five subsidiaries:

§ Bharat Coking Coal Limited (BCCL) (Dhanbad, Jharkhand).

§ Central Coalfields Limited (CCL) (Ranchi, Jharkhand).
§ Western Coalfields Limited (WCL) (nagpur region).
§ Eastern Coalfields Limited (ECL) (Asansol, West Bengal).
§ Central Mine Planning and Design Institute Limited (CMPDIL)(Ranchi, Jharkhand).
§ Indian Institute of Coal Management (IICM)(Ranchi, Jharkhand).
Several years later, three more subsidiaries were added:

§ Mahanadi Coalfields Limited (MCL) (Raulkela).

§ South Eastern Coalfields Limited (SECL) (Bilaspur).
§ North Eastern Coalfields Limited (NECL) (directly under control of coal india limited).
§ Northern Coalfields Limited, Singrauli (NCL,Singrauli).

COAL INDIA IPO:

Objective of the issue:

The objects of the Offer are to carry out the divestment of 631,636,440
Equity Shares by the Selling Shareholder and to achieve the benefits of listing the Equity Shares
on the Stock Exchanges. Our Company will not receive any proceeds from the Offer and all
proceeds shall go to the Selling Shareholder.

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Coal India IPO is likely to be the biggest Indian IPO when it opens on the 18th of October this
year. The IPO is expected to fetch the government $3 billion, by divesting about 10% of it’s
stake in this Navratna. The big numbers are not surprising given that Coal India is the biggest
coal producer in the world with a production of 431.26 million tons in 2010. Coal India also
holds the highest coal reserves in the world, and produced 81.9% of total coal production in
India. They had revenues of Rs. 525,922.92 million in 2010, with a profit after tax of Rs.
98,294.09 million in 2010. The Networth was Rs. 258,437.73 million, cash and bank balances of
Rs. 390,777.60 million, and total debt of Rs. 20,868.51 million, and had 397,158 employees.

With numbers such as these, it is easy to see why CARE assigned a grade of 5 out of 5 to the
Coal India IPO. Point worth repeating is that IPO grades don’t take pricing into account, and
only consider the fundamental strength of the company.
Coal India operates 471 mines in 21 major coal fields across 8 states in India. They produce non
coking coal, and coking coal, but the majority of raw coal production is non coking coal with
91.6%. Despite the big numbers, Coal India continues to expand with 45 projects lined up as of
March 2010. Of these – 22 projects are capacity expansion projects and 23 are new mine
projects. The company sells to power generation, steel and cement companies among other
industrial companies. NTPC was their biggest customer, and the top 5 customers are all public
sector power utilities. The company prices it’s high grade quality coal 15% below the landed cost
of comparative imported coal in India.

Coal India IPO Grading Rationale

It’s not often that an IPO gets graded 5 out of 5, but it’s not very hard to see why Coal India got
graded that based on their near monopolistic position, and their huge size. Here are some points
from the ICRA grading report about the Coal India IPO.

§ Coal India is the largest coal company in the world with access to vast reserves.
§ Highly favorable demand supply situation in the domestic coal industry.
§ Coal India’s near monopolistic position in this industry.
§ Continuous labor productivity due to the use of technology, and high share of production
from open cast mines.
§ Deregulated coal pricing regime gives them the power to price their coal along with other
factors like favorable demand – supply, and cost competitiveness.

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 Coal India Limited (World’s third largest and India’s largest IPO)

Industry: Coal Group: Coal Mines Authority Limited

PROMOTER OF THE THE PRESIDENT OF INDIA, ACTING THROUGH

COMPANY: THE MINISTRY OF COAL, GOVERNMENT OF
INDIA
IPO Snapshot

100% Book Building Issue

Issuer Coal Mines Authority Limited

Public issue of 63,16,36,440 equity shares

Face value Face value of equity shares is Rs.10 per share

Price Band Rs. 225 to Rs. 245 per equity share

Issue Size Rs. 154,750.93 MILLION

Issue is open From October 18 to 21, 2010

Application for the Issue can be for 25 shares and in multiples of 25 shares thereafter

Book Running Lead Managers are · Kotak Mahindra Capital Company

Limited
· Deutsche Equity India Private Limited.
· Enam Securities Private Limited.
· BofA Merrill Lynch
· Citigroup global markets India Private
Limited.
· Morgan Stanley India Company Private
Limited.

Syndicate Member Kotak Securities Limited

Registrar to the Issue is Link Intime India Private Limited

IPO Grading “CRISIL IPO Grade 5/5”, ICRA “IPO Grade

5/5” and “CARE IPO Grade 5/5”, respectively,
indicating that the fundamentals of the Offer
are strong relative to the other listed equity
securities in India.
· Citigroup Global Markets India Private
Limited (57,899,990 equity shares)

· Deutsche Equities (India) Private

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 Underwriters Limited (57,899,990)

· DSP Merrill Lynch Limited(57,899,990)

· Kotak Mahindra Capital Company

Limited (57,899,990)

· ENAM Securities Private Limited

(57,899,990)

· Morgan Stanley India Company Private

Limited (57,899,990)

· Kotak Securities Limited (102)

ALLOTMENT BASIS

Retail investors Not less than 198,965,479 Equity Shares

Non-Institutional Not less than 85,270,919 Equity Shares

Investors

Qualified Institutional At least 284,236,398 Equity Shares

Buyers

Employee Reservation 63,163,644 Equity Shares (568,472,796 Equity Shares)

Capital structure:

Capital structure of the COAL India

Aggregate Value at Aggregate Value at
nominal value (in Offer Price (in Rs.)
Rs.)
A. AUTHORISED SHARE CAPITAL

8,000,000,000 Equity Shares 80,000,000,000

9,041,800 non cumulative 10% 9,041,800,000
redeemable preference shares of Rs.
1,000 each
B. ISSUED, SUBSCRIBED AND PAID
UP SHARE CAPITAL
6,316,364,400 Equity Shares 63,163,644,000

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 631,636,440 Equity Shares 6,316,364,400 154,750,927,800
Which comprises
Employee Reservation Portion of 631,636,440
63,163,644 Equity Shares
Net Offer of 568,472,796 Equity Shares 5,684,727,960

Of which:
QIB Portion of at least 284,236,398 2,842,363,980
Equity Shares
Non-Institutional Portion of not less 852,709,190
than 85,270,919 Equity Shares
Retail Portion of not less than 1,989,654,790
198,965,479 Equity Shares
D. ISSUED, SUBSCRIBED AND PAID
UP SHARE CAPITAL AFTER THE
OFFER
6,316,364,400 Equity Shares 63,163,644,000 1,547,509,278,000
E. SECURITIES PREMIUM ACCOUNT
Before the Offer NIL
After the Offer NIL

Bidding Status (Subscription Detail):

Subscription detail of the COAL India IPO on the day to day basis

Number of Times Issue is Subscribed (BSE + NSE)

Qualified Retail
Non
As on Date & Institutional Individual Employee
Institutional Total
Time Buyers Investors Reservations
Investors
(QIBs) (RIIs)
Shares
Offered / 284,236,398 85,270,919 198,965,479 63,163,644 631,636,440
Reserved
Day 1 - Oct
18, 2010 0.6300 0.1800 0.1000 0.0000 0.3400
17:00 IST
Day 2 - Oct
19, 2010 3.3900 0.5400 0.3500 0.0100 1.7100
17:00 IST
Day 3 - Oct
20, 2010 24.7000 2.8900 1.1000 0.0400 11.8500
20:00 IST

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IPO Listing Detail:
IPO detail after the listing on the 4th November, 2010

IPO Listing Detail

Listing Date: Thursday, November 04, 2010
BSE Scrip Code: 533278
NSE Symbol: COALINDIA
Listing In: 'B' Group of Securities
Sector: Mining - Coal & Lignite
ISIN: INE522F01014
Issue Price: Rs. 245.00 Per Equity Share
Face Value: Rs. 10.00 Per Equity Share

Listing Day Trade Information:

Listing Day Trade Information

BSE NSE
Issue Price Rs. 245.00 Rs. 245.00
Open: Rs. 287.75 Rs. 291.00
Low: Rs. 287.45 Rs. 291.00
High: Rs. 344.75 Rs. 344.90
Last Trade: Rs. 342.35 Rs. 342.55
Volume: 192,839,607 479,716,245

Subscription detail:

The Offer received 1,664,977 applications for 9,60,06,22,625 equity shares resulting in 15.1996
times subscription (Before technical rejections and cheque returns). Out of these there were
313,175 no. of applications for 6,840,061,150 no.of Equity Shares made under the ASBA
process. The details of the applications received in the Offer from Qualified Institutional Buyers.
Non-Institutional and Retail Investor and Eligible Employee categories are as under: (Before
technical rejections and cheque returns).

Category No. of Applications No. of Equity Shares Subscription

Received
Qualified 784 6,996,669,075 24.6157
Institutional Buyers
Non Institutional 9,440 2,143,067,200 25.1325
Investors

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 Retail Individual 1,626,905 454,048,025 2.2820
Investors
Eligible Employee 27,848 6,838,325 0.1083

Final Demand
A sample of the final demand at different bid prices is as under:

No.of % to Cumulative Cumulative

Bid Price Shares total Total % to total
225 802,384,325 7.1299 802,384,325 7.1299
226 38,075 0.0003 802,422,400 7.1303
227 23,225 0.0002 802,445,625 7.1305
228 17,150 0.0002 802,462,775 7.1306
229 9,800 0.0001 802,472,575 7.1307
230 1,597,075 0.0142 804,069,650 7.1449
231 11,700 0.0001 804,081,350 7.145
232 33,700 0.0003 804,115,050 7.1453
233 159,600 0.0014 804,274,650 7.1467
234 36,775 0.0003 804,311,425 7.1471
235 798,347,700 7.0941 1,602,659,125 14.2411
236 14,525 0.0001 1,602,673,650 14.2413
237 15,150 0.0001 1,602,688,800 14.2414
238 33,075 0.0003 1,602,721,875 14.2417
239 11,725 0.0001 1,602,733,600 14.2418
240 21,854,800 0.1942 1,624,588,400 14.436
241 30,675 0.0003 1,624,619,075 14.4363
242 464,950 0.0041 1,625,084,025 14.4404
243 719,925 0.0064 1,625,803,950 14.4468
244 133,650 0.0012 1,625,937,600 14.448
245 9,229,564,750 82.0134 10,855,502,350 96.4613
CUTOFF 398,231,775 3.5387 11,253,734,125 100
TOTAL 11,253,734,125 100

The Basis of Allotment was finalized in consultation with Bombay Stock Exchange Limited
("BSE") on 29 October, 2010.

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A. Allocation to Eligible Employees (After Technical Rejections) Including ASBA
Applications
The Basis of Allotment to the Eligible Employees, who have bid at the Cut-Off price or at and
above the Offer Price of Rs.245/- per Equity Share, was finalized in consultation with the BSE.
The category was subscribed to the extent of 0.096203 times. Tne total number of shares allotted
in this category is 6,076,550 Equity Shares to 24,687 applicants. Full and firm allotment was
made to all valid applications received in this category.

B. Allocation to Retail Investors (After Technical Rejections) Including ASBA Applications

The Basis of Allotment to the Retail Investors, who have bid at cut-off or at and above the Offer
Price of Rs.245/- per Equity Share, was finalized in consultation with the BSE. The category was
subscribed 2.007793 times. The total number of shares allotted in this category is 218,945,962
Equity Shares including spillover from Eligible Employee Reservation Category to the extent of
19,980,483 Equity Shares to 1,517,069 applicants. The category-wise details of the Basis of
Allotment are as under:

Category No. of % to Total % to No. of Ratio Total No.

Applns. total No.of total Shares of Equity
Equity allocated Shares
Shares allotted
applied
25 88669 5.68 2,216,725 0.5 25 1:02 1,108,375
50 111570 7.15 5,578,500 1.27 25 1:01 2,789,250
75 36359 2.33 2,726,925 0.62 37 1:01 1,345,283
100 164151 10.51 16,415,100 3.73 50 1:01 8,207,550
125 25387 1.63 3,173,375 0.72 62 1:01 1,573,994
150 26814 1.72 4,022,100 0.91 75 1:01 2,011,050
175 9641 0.62 1,687,175 0.38 87 1:01 838,767
200 139039 8.9 27,807,800 6.33 100 1:01 13,903,900
225 9793 0.63 2,203,425 0.5 112 1:01 1,096,816
250 18130 1.16 4,532,500 1.03 125 1:01 2,266,250
275 4171 0.27 1,147,025 0.26 137 1:01 571,427
300 22224 1.42 6,667,200 1.52 149 1:01 3,311,376
325 4480 0.29 1,456.00 0.33 162 1:01 725,760
350 5854 0.37 2,048.90 0.47 174 1:01 1,018,596
375 5321 0.34 1,995,375 0.45 187 1:01 995,027
400 889800 56.99 355,920.00 80.96 199 1:01 177,070,200
400 1 0.56597222 112,341

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C. Allocation to Non Institutional Investors (After Technical Rejections) Including ASBA
Applications
The Basis of Allotment to the Non Institutional Investors, who have bid at the Offer Price of
Rs.245/- per Equity Share, was finalized in consultation with the BSE. The category was
subscribed 22.670972 times. The total number of shares allotted in this category is 93,833,983
Equity Shares including spillover from Eligible Employee Category to the extent of 8,563,064
Equity Shares to 8,717 applicants. A sample of the category-wise details of the Basis of
Allotment are as under:

Category No. of % to Total % to No. of Ratio Total No.

Applns. total No.of total Shares of Shares
Shares allocated allotted
applied
425 305 3.44 129,625 0.01 25 3:04 5,725
450 68 0.77 30,600 0 25 4:05 1,350
475 19 0.21 9025 0 25 16:19 400
500 506 5.71 253000 0.01 25 9:10 11350
975 6 0.07 5,850 0 43 1:01 258
1000 584 6.59 584,000 0.03 44 1:01 25,696
3000 64 0.72 192,000 0.01 132 1:01 8,448
17000 13 0.15 221,000 0.01 750 1:01 9,750
29800 1 0.01 29,800 0 1314 1:01 1,314
6734675 1 0.01 6,734,675 0.32 297062 1:01 297,062
20408150 2 0.02 40,816,300 1.92 900189 1:01 1,800,378
40500000 2 0.02 81,000,000 3.81 1786426 1:01 3,572,852
45800000 1 0.01 45,800,000 2.15 2020205 1:01 2,020,205
79000000 1 0.01 79,000,000 3.71 3484625 1:01 3,484,625
80000000 1 0.01 80,000,000 3.76 3528732 1:01 3,528,732

D. Allocation to QIBs Including ASBA Applications

Allocation to QIBs has been done on a proportionate basis in consultation with the BSE. As per
SEBI regulations Mutual Funds were initially allocated 5% of the quantum of shares available
(15,638,997 Shares) including spillover from Eligible Employee Reservation Category to the
extent of 1,427,177 Equity Shares and other QIBs were allocated the remaining available equity
shares (297,140,948 Equity Shares) including spillover from the Eligible Employee Reservation
Category to the extent of 27,116,370 Equity Shares.

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 Category Fls/Banks MFs Flls VCs Insurance Total
Companies
No of 40,547,512 26,695,952 209,455,008 77,503 36,003,970 312,779,945
Shares

Share Holder Pattern:

In (%) 30 OCT 2010

Promoter 90.00
FII 3.32
DII 1.63
others 5.05
Total 100.00

Peer group comparison:

Gujarat NRE Southern
Coal India Coke Fuel Jay Energy
LTP 322.55 62.6 -- 155.85

Change % -1.07 -0.87 -- -1.89

357.60 / 166.90 /
52 W H/L 287.45 97.90 / 54.55 -- / -- 48.00
Results (in Cr.) View in
(Million) -- 10-Jun 10-Jun 10-Jun
Sales -- 452.15 7.99 0.05
PAT -- 20.04 0.14 0.01
Equity -- 548.01 3.46 6.8

OPM % -- 17.2 6.55 18.37

NPM % -- 4.43 1.78 18.37

EPS -- 0.37 0.4 --
CEPS -- 0.59 0.64 --
Ownership -- 10-Sep 10-Sep 10-Sep
Promoter & Promoter
Grp 5,68,47,27,960 24,10,14,701 31,44,650 22,50,000
Indian 5,68,47,27,960 24,10,14,701 31,44,650 22,50,000
Foreign -- -- -- --
Public 63,16,36,440 26,61,28,228 3,10,350 45,47,700
Institution 31,27,79,945 14,51,72,588 29,240 --

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 FII 20,94,55,008 13,85,12,326 -- --
DII 10,33,24,937 66,60,262 29,240 --

Non Institution 31,88,56,495 12,09,55,640 2,81,110 45,47,700

Bodies Corporate 6,06,11,677 2,08,83,529 4,980 5,78,300

Stock Price Movement of Coal India:

Stock Price Movement

Day's High / Low 332.95 / 317.90
Previous Close / Open 328.45 / 326.90
Wtd. Avg Price 325.86
Total Traded Value (Cr.) 181.97
TTQ / 2W Avg Q (Lakh) 55.84 / 356.14
Circuit Limits 394.10 / 262.80
Mkt. Cap. Full / Free Float (Cr.) 2,02,060 / 20,206

Performance of the stock:

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Day to day tracking of the stock performance:

Total
Traded
Prev. open High Low Last Close Average Quantity in Turnover in
Date close Price price price Price price price Lacs Lacs

11- 322.8 336.95

Nov-10 323 321.85 329.6 328.55 331.43 26548372 87,990.18

10- 326.05 327.8

Nov-10 325.4 320.05 321.3 322.8 323.78 21057129 68,179.82

9-Nov- 330.75 333.4

10 330.15 325 325.4 326.05 327.75 23741956 77,813.83

8-Nov- 349.85 355.9

10 351.8 329.5 331.4 330.75 335.19 46932779 157,311.75

5-Nov- 342.55 356.5

10 343 343 348.3 349.85 349.78 31927173 111,674.72

4-Nov- 245 344.9

10 291 291 342 342.55 327.29 479716245 1,570,039.58

News related with COAL India IPO:

1. Coal India IPO to open on October 18
Published on Tue, Aug 31, 2010 at 11:29 | Updated at Tue, Aug 31, 2010 at 15:10 | Source
:Moneycontrol.com

India's largest coal producing company Coal India (CIL) will open its initial public offering
(IPO) for subscription on October 18, 2010. The company is offering 63.16 crore equity shares
through the issue, which was an offer for sale by the President of India, acting through the
ministry of coal, Government of India.
The offer shall constitute 10% of the post offer paid-up equity share capital of company. The
issue will close on October 21.

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As per draft prospectus, CIL is the largest coal producing company in the world (Source: CRISIL
Research), based on raw coal production of 431.26 million tons in fiscal 2010. It si also the
largest coal reserve holder in the world (Source: CRISIL Research) based on reserve base as of
April 1, 2010.
The company will not receive any proceeds from the offer and all proceeds will go to the selling
shareholder (GoI), which stake will be 89.99% post issue.
For the year ended March 31, 2010, CIL has reported net profit of Rs 9,622.45 crore on total
income of Rs 52,592.29 crore.
Book running lead managers to the issue are Citigroup Global Markets India Private Limited,
Deutsche Equities (India) Private Limited, DSP Merrill Lynch Limited, ENAM Securities
Private Limited, Kotak Mahindra Capital Company Limited and Morgan Stanley India Company
Private Limited.

2. Coal India's IPO subscribed over 15 times

New-Delhi - Shares of India's state-run mining giant Coal India Ltd were oversubscribed more
than 15 times on Thursday, the last day of the country's biggest initial public share offering
which aimed at raising 3.5 billion dollars. Bids valued at 2.34 trillion rupees (53 billion dollars)
were received for 9.58 billion shares, over 15 times the number up for grabs owing to heavy
demand from financial institutions and retail investors, stock exchange data showed. The Indian
government was looking at raising 151.5 billion rupees (3.5 billion dollars) by floating 10 per
cent of the company. The IPO from Coal India attracted foreign inflows of around 1.2 trillion
rupees from overseas funds, more than the total inflow of such money in India's equities markets
in 2010. Foreign institutional investors had invested 1.08 trillion rupees in stock markets up till
October 20, according to the Securities and Exchange Board of India (SEBI). "The response to
Coal India IPO, from all the classes of investors, has surpassed even the most optimistic
predictions. This response can prove to be a big morale booster for the government's
disinvestment program," Jagannadham Thunuguntla, head of research, SMC Global Securities
Limited told the IANS news agency. Coal India is one of the world's largest coal mining
companies. It produces about 80 per cent of India's coal from more than 400 mines nationwide.

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3. Coal India IPO price band seen at Rs 225-250/sh: Sources
Published on Mon, Sep 27, 2010 at 08:35 | Updated at Mon, Sep 27, 2010 at 14:27 | Source : Moneycontrol.com

As of March 31, 2010, it operated 471 mines in 21 major coalfields across eight states in India,
including 163 open cast mines, 273 underground mines and 35 mixed mines (which include both
open cast and underground mines). It produces non-coking coal and coking coal of various
grades for diverse applications.
The company will not receive any proceeds from the offer and all proceeds will go to the selling
shareholder (GoI), which stake will be 89.99% post issue.
ICRA has assigned a grade 5 to the proposed issue, indicating strong fundamentals and CRISIL
assigned a grade 5/5, indicates the fundamentals of the IPO are strong relative to the other listed
equity securities in India.
For the year ended March 31, 2010, CIL has reported net profit of Rs 9,622.45 crore on total
income of Rs 52,592.29 crore.
Book running lead managers to the issue are Citigroup Global Markets India Private Limited,
Deutsche Equities (India) Private Limited, DSP Merrill Lynch Limited, ENAM Securities
Private Limited, Kotak Mahindra Capital Company Limited and Morgan Stanley India Company
Private Limited.
4. Coal India IPO to be India's biggest

New Delhi: State-run Coal India Ltd is likely to hit the market by the third week of October
with India's largest ever public offer to raise up to Rs 15,000 crore. The government is
disinvesting 10 per cent of its stake in Coal India (CIL), the world's largest coal miner, through
the IPO. "As of now, it seems that CIL initial public offer will open on October 18 and closes on
October 21. The 10 per cent disinvestment will see the government raising Rs 12,000-15,000
crore," a person in the know of the development said. The blue-print of the IPO was finalised last
evening at a meeting between Finance Minister Pranab Mukherjee and Coal Minister Sriprakash
Jaiswal. The meeting was also attended by Additional Secretary Coal Alok Perti and Department
of Disinvestment Secretary Sumit Bose and Coal India Chairman P S Bhattacharyya, the source
said. Coal India, the largest global coal miner, sells the dry fuel 50 per cent cheaper at around
USD 25 a tonne than the prices prevailing in the international market. Although CIL's IPO was
planned in August-September, it was delayed due to opposition to the government's 10 per cent

17 | P a g e
stake sale move from trade unions and political parties. "The Department of Disinvestment has
finalized the issue date. The company will now file the Draft Red Herring Prospectus of the IPO
by the first week of August," the source added. The government is selling 10 per cent of its stake
in CIL disinvestment. It currently holds 100 per cent equity in the coal major. CIL had earlier
said it will issue over 63 crore shares in the IPO. The Union Cabinet had last month approved to
disinvest 10 per cent of the government's holding in CIL. The Centre holds 100 per cent equity in
the company. Coal India produced 431.5 million tonnes of coal in the last fiscal. The country's
coal output stood at 531.5 million tonnes in 2009-10. Anil Dhirubhai Ambani Group firm
Reliance Power, in January 2008, raised Rs 11,500 crore through IPO – the biggest in India till
date. Aiming to raise Rs 40,000 crore through disinvestment in this fiscal, so far sell off in Satluj
Jal Vidyut Nigam has fetched the exchequer over Rs 1,000 crore. The government is likely to
sell its stake in 10 PSUs, including MMTC, SAIL and Hindustan Copper, this fiscal. The
government in 2009-10 had raised Rs 25,000 crore through stake sales in Oil India, NMDC, REC
and NTPC. NMDC 8.38 per.

5. Coal India IPO sees FII inflow surpassing total inflow in equities

Mumbai, Oct 21 (IANS) The initial public offering (IPO) from Coal India has attracted
foreign inflows of around Rs.1.2 trillion from overseas funds, more than the total influx of such
money in the equities markets in 2010. Foreign institutional investors have invested Rs.1.08
trillion (approximately $24 billion) in the stock markets till Oct 20, as per data available with the
Securities and Exchange Board of India. The Coal India IPO, which closes Oct 21, has already
been oversubscribed 13.46 times till 2 p.m. Thursday. The price band of the IPO is Rs.225-
Rs.245. The allocation for qualified institutional buyers, which include foreign institutional
investors was oversubscribed 24.7 times. The FIIs are bidding for 4,933,872,050 shares. At the
higher price band, this translated into over Rs.1.2 trillion, while at the lower end the inflows
would amount to Rs.1.11 trillion, still higher than the Rs.1.08 trillion pumped in by these
institutions in 2010. However, most of this money, will go back to the overseas funds. But for
the time being, this has resulted in the strengthening of the rupee and diversion of funds from
other stocks to fuel the IPO subscriptions. “The response to Coal India IPO, from all the classes
of investors, has surpassed even the most optimistic predictions. This response can prove to be a

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big ‘morale booster’ for the government’s disinvestment program,” said Jagannadham
Thunuguntla, strategist and head of research, SMC Global Securities Limited.

6. Coal India IPO price band report incorrect: chairman

The chairman of state-owned Coal India Ltd said a newspaper report an Indian government
panel was likely to recommend a price band of Rs 220-240 a share for its IPO was incorrect.
"This information is incorrect," Partha Bhattacharya told Reuters, adding no decision on the price
band for the initial public offering by the world's largest coal miner has been taken yet. The
Economic Times had reported on Tuesday, citing officials with the knowledge of the
development, that a government panel had decided on the Rs 220-240 a share price band that
could raise up to $3.4 billion after feedback from overseas road shows for the offering. A final
decision on the price band will be taken by a group of ministers later on Tuesday. The Indian
government is selling roughly 631.6 million Coal India shares, or 10 per cent of the company,
making it the country's largest initial public offering. The offering opens on Monday.

7. Pricing will do the trick for Coal India IPO: Avinash Gorakshekar, Anagram Capital
Ltd

Avinash Gorakshekar, Head of Research, Anagram Capital Ltd , in a chat with ET Now talks
about Coal India IPO
From a business point of view, definitely it is one of those premier frontline IPOs which an
investor should not miss out. But the key issue would be that what is the kind of pricing the
government does because one would not like to see a fiasco like an NMDC. If the government
wants to get a very large retail base, which it has clearly indicated, they should offer a reasonable
amount of profit upside for the new incoming investors as this will be the first IPO from a PSU
which is a Navratna in that sense If they give a reasonable opportunity for the retail investors to
actually make profits at this point of time where the markets are really at peak levels, then
definitely going forward the perception towards the management because as of now, building a
perception in the minds of the retail investor is very important. So finally pricing will do the trick
and if they do price it at a reasonable price, you will probably see a big kind of qeue even post
listing, once the stock gets listed.

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8. Coal India IPO institutional book fully covered
By Devidutta Tripathy and Ruchira Singh

NEW DELHI (Reuters) - State-run Coal India's $3.5 billion initial public offer received bids
for the entire institutional book midway through the second day, driven by strong investor
demand and lower-than-expected pricing for the country's largest-ever IPO. Institutional buyers
have bid for 1.47 times the shares on offer, Coal India Chairman Partha Bhattacharyya told
reporters at a conference in New Delhi. He expected the offer to be fully covered on Tuesday or
Wednesday. If priced at the top of its 225 to 245 rupee price range, Coal India would have a
market value of $35 billion, ranking it seventh among listed Indian firms. It would surpass
Reliance Power's $3 billion listing in 2008 as India's largest new issue. Stock exchange data at
1.00 p.m. (0730 GMT) showed the overall offer had been covered 0.78 times of the more than
631.6 million shares being sold in the IPO. Most of the bids were at the top end of the price
range. The offering is expected to draw billions of dollars from global investors who have been
pouring money into emerging markets such as India in recent months, in search of higher returns.
A Reuters poll of fund managers last week had found strong interest in the offer near an
estimated price of around 250 rupees a share, given the miner's dominant market position in an
economy growing at 8.5 percent and attractive valuations. Coal India's IPO closes on Wednesday
for institutions and on Thursday for retail investors. Large IPOs in India typically see the
heaviest subscription towards the close of the offering.

Bhattacharyya said the firm's coal production is expected to be close to the set target of 460.5
million tonnes in the current fiscal year, which would be up 6.8 percent from a year earlier. He
also said the world's largest coal miner was unlikely to add new mines this fiscal year. Coal
India, based in Kolkata, produced 431 million tonnes in 2009/10 and accounts for nearly 80
percent of coal output in Asia's third-largest economy. It made a net profit of 98.3 billion rupees
($2.2 billion) in 2010 fiscal year on revenue of 525.9 billion rupees. It expects profits to rise by a
quarter this fiscal year, driven by demand for electricity in India, three-quarters of which is
fueled by coal, and which is forecast to grow 11 percent a year. At the top of its price range Coal
India would be valued at 15.7 times trailing earnings. China's Shenhua Energy trades at 16 times
trailing earnings, while smaller Indonesian peer Adaro Energy has a ratio of 20 times. U.S. miner
Peabody Energy trades at 25 times earnings. The government is selling a 10 percent stake in the

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world's largest coal miner as part of India's broader effort to divest stakes in roughly 60
companies in the next few years. Brokerages have estimated that Coal India could see upside of
roughly 30 percent from its IPO valuation range, and said Coal India deserves a premium to
global peers due to lower earnings volatility, a large undeveloped resource base and potential to
increase prices.

9. Coal India IPO oversubscribed on day-2

MUMBAI (Commodity Online): The Initial Public Offer (IPO) of Coal India Ltd (CIL), the
largest in the Indian corporate history has received heavy inflow of funds from the investors as
the issue has been fully subscribed on the day-2 of its opening on Monday, 18 October, 2010.
On the first day of its opening, Coal India issue was subscribed 34% (0.34 times), while its QIB
portion was fully covered in the early part of Tuesday. The issue has received demands for 1.57
times of shares on offer hours before closure of the second day of the issue on Tuesday. As per
the exchange data, the offer has received bids for over 637 million shares by 3:30 p.m. today.
The company has put on sale more than 631.6 million shares under its IPO, which is priced in the
range of Rs.225 and Rs.245 per share. The government is divesting 10% of its stake in CIL - the
world’s largest coal producer. It aims to raise Rs.15,475 crore at the upper end of the price band
and Rs.14,211.81 crore at the lower band. The offer closes on October 21. For institutional
buyers the IPO will close on October 20. Issue price will be decided by a Group of Ministers on
October 23.
10. Coal India IPO Subscription using Subscription Number
Coal India IPO (initial public offering) for subscription opened on Oct 18 and close on
Oct 21, 2010 and there was a lot of excitement in the media as estimated about its subscription
numbers.The IPO of India’s largest Coal India Ltd received bids for around one-third of its
shares on first day. Get details of Coal India IPO Subscription, using Subscription
Number.Around 0.34 percent that means funds worth over Rs 5,200 crore has been subscribed
on its opening day on October 18 in the country’s biggest Initial Public Offering (IPO) of Coal
India Limited prompting market players to predict how much the final book size would be when
the issue closes on Thursday, 21 October 2010.

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Conclusion:

As we know that the COAL India IPO is the India’s largest IPO ever with the issue
size of the Rs. 154,750.93 MILLION. When we talking about the how strong is Coal India’s
competition then we can say Technically, Coal India is not a monopoly. Many private sector
players today have captive coal fields for their own use. But Coal India and its myriad
subsidiaries virtually control the bulk of this business, if not for anything else, for the simple
reason that nobody else is equipped to cater to the huge Indian demand. For many many years, if
not decades, Coal India is not expected to have any serious competition. At the other side when
we talking about the long term investors then we can say that is the profitable for the investors,
there are chances that Coal India will be one of those issues fit for the invest n’ forget
philosophy, much like Reliance Industries or Infosys. The demand story and the growth story of
Coal India is akin to the best in Indian industry, with the demand insatiable and the growth
relentless. Such factors make Coal India one of those rare IPOs that can be massive wealth
creators over two, five, ten, or fifteen years down the way. At the other hand Coal India IPO is
supported by the IPO is supported by Wall Street majors like Citi, Deutsche Bank, BofA -
Merrill Lynch, & Morgan Stanley, as well as Dalal Street biggies like Enam & Kotak. The idea
of having 30% reserved for anchor investors is already being scrapped, as the international road-
shows progress, and the underwriting institutions are themselves busy readying funds and
formalities to subscribe to the issue. Investors have the very high trust on the Coal India because
it is running by the government itself. Because of this public know that if there is any problem
occur with the IPO then there is authority that is for to solve the problem. The most important
thing with the coal IPO is that India’s President is the promoter of the company.

When we talk about the gain from it then it

will give the short term as well as the long term profits to its investors. As we can see it from the
day of the listing on 4th Nov it was close on the 342.95 that is more Rs. 97.95 from the price
fixed at 245. So we can say that to invest in the Coal India is a good deal.

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References:
Ø www.coalindia.in
Ø http://www.commodityonline.com/commodity-stocks/Coal-India-IPO-oversubscribed-
on-day-2-2010-10-19-32696-3-1.html
Ø http://timesofindia.indiatimes.com/business/india-business/Coal-India-IPO-
oversubscribed-157-times/articleshow/6775221.cms
Ø http://www.moneycontrol.com/news/ipo-issues-open/coal-india-ipo-subscribed-034-
timesday-1_492099.html
Ø http://www.onemint.com/2010/10/18/coal-india-ipo-subscription-numbers/
Ø http://today24news.com/business/coal-india-ipo-subscription-using-subscription-number-
195595
Ø http://www.nseindia.com/marketinfo/ipochart/ipochart.jsp?issue=COALINDCUMUEQ&
ir=I&cn=C&sd=D&cnlink=N
Ø http://www.ziczaczoom.com/2010/10/finance/coal-india-ipo-subscription-status/
Ø http://www.indianipoblog.com/
Ø http://in.biz.yahoo.com/101019/137/baweq6.html
Ø http://www.thaindian.com/newsportal/business/coal-india-ipo-sees-fii-inflow-surpassing-
total-inflow-in-equities_100447539.html
Ø http://www.reuters.com/article/idUSTRE69J26320101020
Ø http://in.biz.yahoo.com/101020/50/bawf2f.html
Ø http://www.rupya.com/tag/coal-india-subscription-details
Ø http://www.rupya.com/category/ipo-oversubscription-details
Ø http://www.indiaeveryday.com/finance/fullnews-coal-india-gives-investors-exit-option-
until-oct-25-1023-1906962.html
Ø www.sebi.gov.in

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