The public issue of Coal India Ltd (CIL), the country's biggest till date, saw a good response on the first day. The initial public offering (IPO), expected to raise R15,475 crore, received subscription for over one third of the total issue size.
Qualified Institutional Buyers (QIBs) subscribed to 63 per cent of their portion, while high-networth individual (HNI) and retail subscription stood at 18 and 10 per cent respectively till 5 pm on Monday.
The issue, therefore, has already attracted R5,261 crore at 34 per cent subscription level, which experts claimed is a good subscription amount on the first day, considering the issue size.
"Now institutional investors have to put 100 per cent of their application money and considering that a 34 per cent subscription is phenomenal for this size of issue," said Prithvi Haldea of Prime Database. "It does not make sense for them to block big amount of money on Day One and so more money will flow toward the end of the subscription period."
"There is a lot of enthusiasm among retail investors as CIL is about a strong fundamental story," said SP Tulsian, an investment advisor. "There is good grey market for the IPO and it is commanding a premium of Rs30 per share."
Those close to the issue suggest that that there is a strong demand from QIBs and more money will flow in towards the end of the subscription period.
"The QIBs come with big amounts and many of them do not want to block the money on the first day," said a source close to the development on the condition of anonymity.
Foreign institutional investors (FIIs) pumped in R654 crore on Monday, of which R499 crore went into the primary market. FIIs had invested R1,798 crore in the primary market on Friday.
The Sensex opened on a weak note and slipped below 20,000 after losing 255 points in initial trade, but it recovered to close at 20,168 with a gain of 44 points.
Unions keeping staff away from IPO: CIL head
Coal India chairman and managing director Partha Sarathi Bhattacharyya lashed out at trade unions for coming in the way of the employees subscribing to the company's IPO.
"We are not happy with the participation of the employees," he said. "Their participation was highly desired as they are only to benefit from this IPO."
"Trade unions are objecting to the employee participation to the IPO," he added.