Coal India IPO has seen strong demand. India’s biggest IPO has been subscribed at 11.4 times on Day 3. The QIB book which closes today has seen epic demand of over 24 times. The response has been pretty exceptional in Indian capital markets’ history. Retail and non-institutional investors’ bit got subscribed 0.79 times and 1.38 times, correspondingly.
The government will lose an estimated interest income of over Rs 002 crore on application money as mainly foreign and domestic institutional investors have selected to invest in the Coal India public issue through the Application Supported by Blocked Amount (ASBA) route.
The issue has seen a total demand of USD 35 billion. It has inward bids for 656.15 crore equity shares as against the issue size of 63.16 crore shares. The issue will close up on October 21 for retail investors, NIIs and employees.
The government had entered into a contract with the chosen banks of the book running syndicate, under which banks were allowed to keep only 10% of the interest income on the application money with the balance 90% going to the ex-chequer.
The qualified institutional buyer (QIB) part of the Coal India issue has been subscribed 24.7 times. In result, this means that against the offer of shares value Rs 7,000 crore, there is previously an institutional demand for shares of Rs 172,000 crore.
Though, institutional investors now need to reserve the intact application money upfront over 70% of the bidders have applied through ASBA, two people who are part of the Coal India issue told.
Among the domestic institutional investors, state-owned Life Insurance Corporation and State Bank of India have put in requests of the entire QIB portion. In accumulation, nationalised banks have together applied for shares of over Rs 10,000 crore. All these banks have used the ASBA route.
The retail and high net worth individuals (HNI) portion which is open for contribution till Thursday, has also received devastating response. The HNI and retail portions have already been subscribed 1.5 and .09 times, correspondingly. general, the issue has been subscribed over 11 times till Wednesday.
