Diwali gift for Coal India investors

It was a welcome Diwali gift for retail investors of Coal India (CIL), when the company's shares got listed at Rs 287.75 and zoomed to a high of Rs 340 during mid-session on the Bombay Stock Exchange on Thursday.

CIL, India's largest coal producing company, has raised Rs 15,200-crore through its intiial public offer (IPO) at the issue price of Rs 245 a share - higher end of the price-band of Rs 225-245.

"Our small investors got good listing gains. These investors were allotted shares at Rs 232.75 a share, a discount of 5 per cent to the final issue price of Rs 245 and we can see how much they gained. It will be a rewarding investment for them," Chairman Partha Bhattacharyya told reporters after the listing ceremony at BSE.

Retail investors received 199 shares in allotment, which gave returns of Rs 92 per share upon listing, taking total profit to Rs 18,308 (at Rs 324.95 a share). Even investors like high networth individuals and qualified institutional investors got a profit of Rs 79.95 a share upon listing.

"It was historic day, not only for Coal India, but for the enitre capital market. We are happy with the listing and expect the stock to outperform ahead," Bhattacharyya said.

CIL's investors, buyers and sellers will be able to reap gains out of the whole process of CIL's disinvestment, Bhattacharyya said, adding the company is fundamentally very sound.

On the company's future plans, Bhattacharyya said that the company will go ahead with its Rs 3,800-crore capital expenditure plan this year and Rs 4,600-crore capex plan in 2011-12, which will be met through internal accruals.

"We are setting up 20 washeries and have already placed the first order. We expect to place orders for another two within this financial year and tenders for 11 more washeries have been floated," Bhattacharyya said, adding the results of these activities will be visible in next 2-3 years.

The company will use its cash reserves for overseas acquisitions and "we are moving in that direction," he said.

Commenting on the concerns raised by the Environment Ministry on coal mining, Bhattacharya stated the company is keen on resolving any such issues. "We are willing to work out a middle path on environment issues," he said.