Coal India shares leap 40pc on debut
Friday, 5 November 2010
MUMBAI, Nov 4 (AFP): Shares in state-run Coal India soared nearly 40 per cent on their first day of trading on the Mumbai stock market Thursday as investors scrambled to invest in the world's biggest coal miner.
The sale of a 10-per cent stake in Kolkata-based Coal India last month was the biggest share sale in Indian history and banked the government 3.4 billion dollars.
The shares jumped to 340 rupees (7.7 dollars) in morning trade, up 38.7 per cent from the issue price of 245 rupees, handing those able to buy in the initial public offering (IPO) a handsome profit on paper.
The strong debut bodes well for other part-privatisations in India, where the government has an ambitious divestment programme entailing sales of chunks of strategic state-owned firms.
"This beats our expectations. A 40-per cent premium is a strong performance," said Paresh Jain, metals and mining analyst with Mumbai-based Angel Broking.
The group is the world's largest coal miner, producing over 80 per cent of India's coal at 471 mines across eight states.
It also holds the largest extractable coal reserves in the world with over 22 billion tonnes, ahead of rivals China Shenhua Energy and the world's largest private miner, Peabody Energy in the United States.
Coal currently accounts for more than half of India's energy use and consumption is set to increase as the country's economic development accelerates in energy-intensive sectors such as steel and cement manufacturing.
The sale of a 10-per cent stake in Kolkata-based Coal India last month was the biggest share sale in Indian history and banked the government 3.4 billion dollars.
The shares jumped to 340 rupees (7.7 dollars) in morning trade, up 38.7 per cent from the issue price of 245 rupees, handing those able to buy in the initial public offering (IPO) a handsome profit on paper.
The strong debut bodes well for other part-privatisations in India, where the government has an ambitious divestment programme entailing sales of chunks of strategic state-owned firms.
"This beats our expectations. A 40-per cent premium is a strong performance," said Paresh Jain, metals and mining analyst with Mumbai-based Angel Broking.
The group is the world's largest coal miner, producing over 80 per cent of India's coal at 471 mines across eight states.
It also holds the largest extractable coal reserves in the world with over 22 billion tonnes, ahead of rivals China Shenhua Energy and the world's largest private miner, Peabody Energy in the United States.
Coal currently accounts for more than half of India's energy use and consumption is set to increase as the country's economic development accelerates in energy-intensive sectors such as steel and cement manufacturing.