Coal India unit's $199m IPO fully subscribed on final bidding day
Central Mine Planning & Design Institute's (CMPDIL's) $198.7-million initial public offering was fully subscribed on the final day of bidding on Tuesday, helped by large institutional investors.
The company, a subsidiary of the world's largest coal miner, Coal India, received bids for 83.7-million shares, against 79.8-million on offer, exchange data updated at 5:42 p.m. IST showed.
Qualified institutional buyers subscribed to more than three times the reserved portion, while retail investors bid for a third of the shares on offer, with analysts citing fragile global sentiment from the ongoing war in the Middle East.
CMPDIL's IPO follows a successful public listing in January by another Coal India unit, Bharat Coking Coal. The company's shares nearly doubled on debut, marking one of the strongest listings in India in recent years. Its IPO was subscribed about 147 times over, led by strong demand across retail and institutional buyers.
Swastika Investmart said that CMPDIL's discounted valuation and debt-free balance sheet makes it a tactical short- to medium-term play, but its reliance on Coal India for 90% of its revenue is an immediate risk.
The company, which provides consultancy and support services for coal and mineral exploration, is seeking a valuation of up to $1.33-billion. It raised 4.69-billion rupees ($50.26-million) from anchor investors on Wednesday, with about 69% of the funds coming in from domestic mutual funds and life insurance companies.
The IPO is fully an offer for sale, with Coal India planning to offload up to 107.1-million shares. The stock is expected to list on March 30.
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