Coal India IPO turned out to be a huge success with the issue receiving bids for over 15 times the shares on offer. The Rs 15,000 crore-IPO generated demand worth over Rs 2.3 lakh crore (around $52 billion) boosting government?s confidence in meeting its disinvestment target of Rs 40,000 crore for this fiscal year. The over 631.6 million-offering received bids for over 9.6 billion shares, 353 million of which came in at the cut-off price, as per the exchange data.

?The IPO will certainly improve the sentiments for future disinvestment,? said Sanjay Sharma as Managing Director and Head of Equity Capital Markets (ECM) India, Deutsche Bank. The Qualified Institutional Buyers (QIB) category, which closed for subscription on wednesday, was subscribed 24.7 times. The Non Institutional Investor (NII) quota was subscribed relatively higher at 25.4 times, while the retail category was subscribed 2.15 times on the final day of the IPO as at 7 pm . The employee portion remained highly undersubscribed.

According to merchant bankers, the IPO received over 15 lakh retail applications, highest ever in a public sector IPO, topping NHPC?s 13 lakh retail applications. One out of every ten retail equity investor in the country has participated in the Coal India IPO. There are close to 1.5 crore retail equity investors in the country. However, the number of retail applications were less compared to Reliance Power, which received more than 46 lakh applications and Reliance Petroleum, which got over 21 lakh applications. ?The retail response to the issue was better than what we had expected. It will help lift investor sentiments in the primary market,? said Vineet Arora, head of product and distribution, ICICI Direct.?It would be not right to directly compare this IPO to Reliance Power as the current market mood is relatively less bullish.? According Sharma of Deutsche Bank, average retail application size for Coal India issue was about Rs 70,000, higher than the average ticket size of Rs 40,000 for other issues?.

The IPO is likely to be priced at the top end of the Rs 225-245 price band, due to the huge response, said merchant bankers, who believe the shares could surge more than 10% on listing. The stock on thursday was commanding a grey market premium of Rs 30, 12% more than its top end price of Rs 245. The company is expected to list on November 4 just prior to Diwali.

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