Retail investors to get unsubscribed staffers’ quota in IPO
Investment bankers have finalised the basis of allotment for the mega issue of Coal India Ltd (CIL), whose shares are going to be listed on the bourses on November 4, a day before Diwali.
The unsubscribed portion in the employee category, which saw bidding for just 10 per cent of reserved shares, will be allocated to retail investors. Of the 63.16 million shares in the employee quota, 56.98 million will be transferred to the quota for retail investors. The latter will get nearly half the shares they’d applied for. This means those who made a full application of 400 shares are likely to get 199. The retail category was subscribed 2.31 times in the state-run company’s initial public offer (IPO).
For those who applied through the Application Supported by Blocked Amount (Asba) route, money is likely to be debited from their account tomorrow.
The IPO, in which the Union government sold 10 per cent of its 100 per cent stake to raise Rs 15,200 crore, saw excellent response. The initial share sale offer from the world’s largest coal producer was subscribed 15.28 times. The categories reserved for qualified institutional buyers (QIBs) and non-institutional buyers (NIIs) in the issue were oversubscribed 24.7 times and 25.4 times, respectively.
The issue attracted saw 1.68 million applications from investors, with bids worth Rs 2,36,000 crore. The category reserved for retail investors saw about 1.65 million applications; for NIIs, about 9,500 applications, and QIBs, 770 applications. However, subscription in the employee category saw only 25,000 applications from 394,000 staffers.
Market participants expect Coal India’s shares to list at a premium of Rs 30-40 from their issue price of Rs 245. The company has given a five per cent discount to retail investors and employees on the issue price, so their acquisition cost would reduce to Rs 232.75 a share.