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Coal India OFS of at a floor price of Rs. 358, Apply

Published on Thursday, January 29, 2015 by Dilip Davda | Modified on Wednesday, July 22, 2015

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Coal India OFS of at a floor price of Rs. 358, Apply

On one hand we have secondary market posting new historic highs and FIIs being the rampant buyers for all this while, primary market remained silent with no activities. However, fewer SME as well as OFS offers kept visiting the market. But now the mega OFS (Offer for Sale) offer is opening on Friday i.e. 30.01.15 for Coal India whereby Government of India is looking at mobilizing around Rs. 23K to Rs. 24K crore. 25% of such OFS is reserved for Mutual Funds, Insurance Companies. Details of this offer are as under:

Base size of the offer is 5% stake dilution at a floor price of Rs. 358 against its closing price of Rs. 375.15 on Thursday eve. In the base size for 5% stake dilution, total shares on offer are 315818220 shares of Rs. 10 each at a floor price of Rs. 358 with a tick price limit of Rs. 0.05 paise per share. 252654576 shares are reserved for Non-Retail and 63163644 shares for retail category. If the offer gets overwhelming response the size will be doubled for the respective categories to make 10% dilution as planned originally. Retail investors are eligible for 5% discount to the final offer price. The offer opens at 9.15 am on BSE and NSE and will close at 15.30 pm. The allotment will be on price priority basis. As this is online offer, the minimum lot size is 1 share, but investors should go for what they can based on their fund position.

Selling members include 1) DSP Merrill Lynch Limited 2) Credit Suisse Securities (India) Private Limited 3) Deutsche Equities India Private Limited 4) Goldman Sachs (India) Securities Private Limited 5) J M Financial Institutional Securities Limited 6) Kotak Securities Limited 7) SBICAP Securities Limited and the seller promoter is The President of India acting through and representated by the Ministry of Coal, Government of India.

Soon after this, we are likely to witness more OFS (divestment) from Govt. of India in the form of ONGC, RCF, IOC, NMDC, BHEL, Nalco, Dredging Corp, PFC, REC etc as the Government is looking serious for raising the targeted Rs. 43425 crore before this fiscal end. Thus this offer is going to be the biggest OFS from the same company that did a record of biggest IPO for Rs. 15199 crore in October 2010.

In the current fiscal so far, Govt. Of India could raise only Rs. 1715 crore by way of divestment. It appears that Finance Ministry does not prefer to miss this golden opportunity as secondary market is at its high spirit at this juncture and is thus trying to set an example of daring to bring issues for primary market that is still in dilemma.

As far as retail investors are concerned, they should not miss such golden opportunities and should go ahead to grab it through their brokers.

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About Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com


11 Comments

11. DURAISWAMY  Feb 18, 2015 20:34 I Like It. | Report Abuse Reply
WHAT IS OPEN OFFER ?
10. Sandeep  Feb 7, 2015 05:36 I Like It. | Report Abuse Reply
How 5% off on Cola India will come? The Floor price was 358, I applied for 358 and got the allotment. 5% discounted money has not come yet. Anyone to be contacted in this regard?
9. R gounder  Feb 4, 2015 09:47 I Like It. | Report Abuse Reply
Allotment is done and I sold it for 358.45
8. O P GARG  Feb 3, 2015 11:19 I Like It. | Report Abuse Reply
request some one about alllotment detail of CIL ofs,thanks
7. manoj gupta  Feb 3, 2015 08:50 I Like It. | Report Abuse Reply
Dear friends,
Any body get allotement of Coal India OFS share in DMAT.I did not get shares in DMAT till now.From where i can get the conformation of my allotement.Most of my friends sell thier shares yesterday without shares in DMAT.Can I sell it today.
6. Alok  Jan 31, 2015 10:27 I Like It. | Report Abuse Reply
Allotment is as per the bid price. If you have bid for 400/- you''ll get it @ 400 and then 5% off on that
5. sam  Jan 30, 2015 21:44 I Like It. | Report Abuse Reply
Retail investors subscribed only half of their quota. so cut off would be 358 I assume ?
4. sam  Jan 30, 2015 21:40 I Like It. | Report Abuse Reply
allotment will be at 340 for retail. From today''s close of 360 - its gain of 6% in 1 day already.
3. friend  Jan 30, 2015 19:29 I Like It. | Report Abuse Reply
Any news about allotment price?
2. HITESH  Jan 30, 2015 14:47 I Like It. | Report Abuse Reply
358
1. anurag  Jan 29, 2015 22:46 I Like It. | Report Abuse Reply
At what price should a retail investor invest to get sure shot allotment.
Since 258 is the floor price, should one bid for more than 258.

Same thing happened with SAIL OFS. 83 was floor price but firm allotment came at 83.4 appt.