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Coal India IPO Shares – Listing Analysis

Many big mutual funds and foreign Institutional investors did not invest a big amount in the Coal India IPO as they were not sure of getting full allotment because of the high over subscription levels of more than 15 times. As most institutional investors  have to invest 100 per cent of the application money as per SEBI norms,  many of them didn’t want to take the risk of refund.The retail subscription of Coal India was oversubscribed by 2.31 times. So most retail investors will not be able to get full allotment.

All these investors are now expected to buy from the secondary market on the day that Coal India will list. This is expected to drive the price of Coal India shares to more than Rs 300 which will translate into gains of 20-25 % over the issue price of Rs 245.The grey market premium for Coal India is currently hovering in the narrow range of Rs 30-35.

Coal India Share Analysis, IPO Allotment and Listing

The listing date of Coal India has been finanlized to 4th November 2010 which is a thursday. The alloted shares are likely to be credited to demat accounts only from the 1st of November. The government has not yet declared the allotment ratio but some experts believe the allotment ratio could be 1:3.

Coal India IPO Analysis

3 Reasons why you should buy more Coal India Stock

  1. Coal India is the largest coal producer in the world and it is unique and there are no comparable companies listed on the stock exchanges in India.
  2. Coal will continue to be the prime source of energy in India over the next 50 years. So, Coal India has good prospects of increasing its profitability in the coming years because coal is limited resource and the prices of coal can only go up.
  3. Coal India could one day be included in the sensex and the nifty indices because of it’s unique nature and foreign investors will continue to accumulate the stock.

Coal Prices peaked in 2008 before cooling off substantially, but are slowly rising again.

Abhay N

Author : 

Abhay is the founder and managing editor of India Microfinance. He is passionate about microfinance, financial inclusion and social entrepreneurship in India.

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