In a dream debut on Thursday, shares of Coal India (CIL) listed way above the issue price of Rs 245 to close 40% higher at Rs 342.25 on the Bombay Stock Exchange. The Rs 15,000-crore IPO of the state-owned miner, the largest yet in India, turned out to be a Diwali gift for small investors who were allotted shares at a discount of 5% to the issue price.

CIL is now India?s fourth-most valuable company commanding a market capitalisation of Rs 2.16 lakh crore ($48 billion) a shade below State Bank of India?s Rs 2.18 lakh crore.

Globally, the public sector firm is the second-most valuable miner after Shenhua, China?s biggest coal producer, which commands a market capitalisation of $87 billion. CIL is all set to make an entry into the FTSE All-World Index and FTSE All-Emerging Index and will probably be included in these gauges from November 5, 2010. About 672 million shares were traded in the Coal India counter, resulting in a turnover of more than Rs 22,000 crore on the BSE and NSE.

The turnover was more than the average daily cash market turnover of both exchanges in the past six months. ?Offerings like CIL will help galvanise retail investors and that, in turn, will help broaden the investor base in the country,? said Uday Kotak, VC & MD, Kotak Mahindra Bank.

The CIL stock opened the session at Rs 291 and touched an intra-day high of Rs 342.55 on the National Stock Exchange (NSE).

The IPO had been oversubscribed more than 15 times with the retail quota seeing a subscription of 2.3 times while the institutional portion received an oversubscription of 23 times. Small investors, who applied for Rs 1 lakh worth of shares, were allotted 199 shares each.

The IPO had attracted close to 16 lakh retail applications. Among the larger foreign institutional investors who are understood to bid for the shares include Janus Capital, Fidelity and Franklin Templeton. ?The issue has created value across all stakeholders and demonstrates clear appetite for good quality issuances,? said Saurabh Sonthalia, head of global capital markets, Merrill Lynch.

Ravi Kapoor, head of global banking, Citi India, said: ?The listing has exceeded expectations, reinforcing the fundamental strength of the company and investors’ faith in the Indian markets. We expect enhanced retail participation in all the disinvestment deals.?