COAL INDIA LIMITED

COAL INDIA LIMITED IPO ISSUES

Coal India Ltd. may sell as much as 151.5 billion rupees ($3.4 billion) of stock in the nation’s biggest initial share sale as investors bet surging energy demand will override environmental delays for new mines.
Fifteen of 18 investors surveyed by Bloomberg News said they plan to bid for shares in the world’s largest coal producer. The stock of the state-owned company will be sold in a range of 225 rupees to 245 rupees each, starting Oct. 18, with the proceeds helping the government narrow its budget deficit, Coal Minister Sriprakash Jaiswal said on Oct. 12.

“Apply to buy as much as you can,” said Manish Sonthalia, who manages $230 million in equities at Motilal Oswal Securities Ltd. in Mumbai, who’s advising investors to bid at the top end of the range. The stock could gain 34 percent in the first year, said Sonthalia.

India’s coal imports surged 16 percent in the year ended March 31 as power plants burned more of the fuel to meet demand in Asia’s second-fastest growing major economy. Coal India will seek environmental clearances from the government to mine in densely forested areas in states including Jharkhand and Chhattisgarh estimated to hold half of its future output.

“The shares are available at a price cheaper than their global peers,” said Deven Choksey, chief executive officer at K.R. Choksey Shares & Securities Pvt., manager of the equivalent of $124 million in assets. “They have large cash holdings on their balance sheet and the world’s largest coal reserves. They haven’t charged a premium for this.”