Coal India, the world’s largest coal miner, which is planning to raise around R15,400 crore through its upcoming initial public offering (IPO), will invest R6,000-crore ($ 1.2 billion) in acquisitions abroad.
“We are looking at acquisitions in the US, Australia and South Africa, for which we will invest R6,000-crore ($1.2-billion) this fiscal,” said Partha Bhattacharyya, chairman, Coal India in a press conference press conference to announce the details of the share offering.
The company is looking at high-value coal mines in the US and it will enhance its investment limit later.
“We will go for washing of coal in a big way. Margin growth will be the dominant focus,” he said.
Coal India is entering the capital market on October 18, with a public offer of 631,636,440 shares of R10 each through an offer for sale by the government at a price-band ranging between R225-245 per equity share. Retail investors and employees will be offered a 5 per cent discount.
The company will raise between R14,200-crore and R15,400-crore.
After the discount, the amount aggregates to Rs 13,909-crore and Rs 15,151-crore.
Coal India is the largest coal producer with raw coal production of 431.26-million tonnes in fiscal 2010. It is also the largest reserve-holder in the world.
On the company’s future outlook, Bhattacharyya said “we expect a 15-16 per cent topline growth in the next two-years."
Morgan Stanley, Citigroup, Kotak Mahindra Capital, Enam Securities, Deutsche Bank and Bank of America-Merrill Lynch are managers on the offer.
“Coal India is the ideal public issue to strengthen the case of equity investing in India by foreign institutional investors (FIIs) and also retail investors. With a possible appreciation to $50 billion (around R2,22,000) market cap over time, this company adds to the quality of stock available on Indian bourses,” said Amar Ambani, head of research, India, private clients, India Infoline.
“Long term investors can subscribe to this issue,” he added.