Dear Friend,

Thank you for visiting my Blog. Not all of us were born in a rich family and we always think about retiring as a CROREPATI. Thinking is one thing, have you done anything to achieve that dream?

In order to become rich, you have to invest and do it wisely. For that you need knowledge and ideas. There are a few good books that I have published which you can buy for a nominal price which can help you with that.
With the New Year on the horizon, the price of all the books have been slashed by 50% or more.

To know more about these books, their price and check out a sneak preview, please Click Here...


Best Wishes!!

Anand

Tuesday, October 26, 2010

Coal India IPO Price Finalized

In my previous article on the Coal India IPO I had elaborated about this
humongous IPO given out by the government of india and the details of the same.

If you recollect, the offer price band was Rs. 225 – 245 per share. The IPO received a
magnificent response from investors and was totally oversubscribed 15.28 times. (i.e.,
for every 1 share available for sale, there are 15.28 people willing to buy it)

Because of the overwhelming response, the offer price has been fixed at the higher
end of the price band i.e., Rs. 245 per share. Of course, retail investors will get an
extra 5% discount on the price that is Rs. 12 per share, so the price we would be
getting the shares (if you subscribed and got shares allotted) is Rs. 233/-

Oversubscription Details:

Though the IPO was overall oversubscribed 15.28 times, a major chunk of it was from
QIBs and NIIs followed by retail investors.

QIB’ s – 24.7 times
NII’ s – 25.4 times
Retail Investors – 2.31 times

Undersubscription Details:
The company had reserved 63,163,644 equity shares (nearly 10%) of the issue for its
employees. Amid fears of privatization of the CIL, it received a stone cold response
from its employees. This section was subscribed only 0.1% which means that 99.9%
of the shares in this section were not subscribed.

By now, you are mumbling, what about the employee’ s portion of the shares which is
subscribed only 0.1 times. My dear reader, yesterday there was also a press release by
the authorities. They confirmed that the undersubscribed shares from the employees
portion would be shared in the ratio of 50:35:15 between QIB’ s, Retail and HNI’ s.

i.e., if 100 shares are available from the employees quota, 50 would be allotted to
QIB’ s, 35 to retail investors and the remaining 15 to HNI’ s.

Note: The chances of retail investors getting shares allotted is very high. Majority
of people who subscribed @ Rs. 245 per share would be allotted shares because the
retail investors section is oversubscribed only 2.31 times and also a majority of the
investors would not have bid at the higher price band and would have stuck to the
lower band of Rs. 225 or nearer amounts. Plus there is this extra shares available from
the employees Quota. So, the chances of us getting shares allotted is significantly
high. Lets keep our fingers crossed.

Happy investing!!!

Terms used in this article:

QIB – Qualified Institutional Buyer
HNI – High Networth Individual
CIL – Coal India Ltd
NII – Non Institutional Investors

No comments:

Post a Comment

© 2013 by www.anandvijayakumar.blogspot.com. All rights reserved. No part of this blog or its contents may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the Author.

Google+ Badge

Google+ Followers

Followers

Popular Posts

Important Disclaimer

All the contents of this blog are the Authors personal opinion only and are not endorsed by any Company. This website or Author does not provide stock recommendations. The purpose of this blog is to educate people about the financial industry and to share my opinion about the day to day happenings in the Indian and world economy. Contents described here are not a recommendation to buy or sell any stock or investment product. The Author does not have any vested interest in recommending or reviewing any Investment Product discussed in this Blog. Readers are requested to perform their own analysis and make investment decisions at their own personal judgement and the site or the author cannot be claimed liable for any losses incurred out of the same.