Coal India IPO sees FII inflow surpassing total inflow in equities
By IANSThursday, October 21, 2010
MUMBAI - The initial public offering (IPO) from Coal India has attracted foreign inflows of around Rs.1.2 trillion from overseas funds, more than the total influx of such money in the equities markets in 2010.
Foreign institutional investors have invested Rs.1.08 trillion (approximately $24 billion) in the stock markets till Oct 20, as per data available with the Securities and Exchange Board of India.
The Coal India IPO, which closes Oct 21, has already been oversubscribed 13.46 times till 2 p.m. Thursday. The price band of the IPO is Rs.225-Rs.245.
The allocation for qualified institutional buyers, which include foreign institutional investors was over subscribed 24.7 times.
The FIIs are bidding for 4,933,872,050 shares. At the higher price band, this translated into over Rs.1.2 trillion, while at the lower end the inflows would amount to Rs.1.11 trillion, still higher than the Rs.1.08 trillion pumped in by these institutions in 2010.
However, most of this money, will go back to the overseas funds. But for the time being, this has resulted in the strengthening of the rupee and diversion of funds from other stocks to fuel the IPO subscriptions.
“The response to Coal India IPO, from all the classes of investors, has surpassed even the most optimistic predictions. This response can prove to be a big ‘morale booster’ for the government’s disinvestment programme,” said Jagannadham Thunuguntla, strategist and head of research, SMC Global Securities Limited.
