Thursday, November 4, 2010

Coal India

So the Coal India IPO was a blockbuster and the listing was a stupendous success - for whom?
Not for Coal India methinks... I am a semi-literate when it comes to equity markets but even I could see that the issue price band was a very healthy valuation in a roaring market.
Can we say that the bankers (primarily because they) retained nominal, inconsequential fees and possibly decided to price the issue aggressively (on the downside)? Is it possible that they made much more money just based on IPO funding and such? I would think so...
Did anyone see the mind-boggling volumes on Coal India on the first day?

On the NSE : 479716245 shares Rs. 15700 Crore ($3.5 billion) - the company raised $3.3 billion.
On the BSE: Rs. 6324 Crore
More perplexing is the number because of the absence of futures and options on the scrip - therefore arbitrage had nothing to do with driving up volumes.
My guess is that certain brokerage/ NBFCs minted tonnes of money just on front running and IPO funding - waiting for Q3 results :)

No comments:

Post a Comment