State-run Coal India Limited may scrap allotment under the anchor investor plan of its mega initial public offering (IPO) as the government feels selection of such investors — in case their demand for the issue exceeds the limit — may not be transparent.
The government expects to raise up to R12,000-15,000 crore through the Coal India IPO, billed as the country’s largest ever. The Empowered Group of Ministers working on the IPO would meet by September-end to decide on the anchor investor issue and on October 12 on the price band of the shares being offered, sources said.
“We believe demand for placement for anchor investors will exceed the quota limit. We may have to be discretionary about whom to choose. This is something which the government is not comfortable with as the process of selection may not be transparent,” sources said.
CIL Chairman Partha S Bhattacharyya, however, said dropping the anchor investor portion was unlikely to impact the valuation and interest from investors who could participate as qualified institutional buyers.