India's largest coal producing company Coal India (CIL) will open its initial public offering (IPO) for subscription on October 18, 2010. The company is offering 63.16 crore equity shares through the issue, which was an offer for sale by the President of India, acting through the ministry of coal, Government of India.
The offer shall constitute 10% of the post offer paid-up equity share capital of company. The issue will close on October 21
As per draft prospectus, CIL is the largest coal producing company in the world (Source: CRISIL Research), based on raw coal production of 431.26 million tons in fiscal 2010. It si also the largest coal reserve holder in the world (Source: CRISIL Research) based on reserve base as of April 1, 2010.
The company will not receive any proceeds from the offer and all proceeds will go to the selling shareholder (GoI), which stake will be 89.99% post issue.
For the year ended March 31, 2010, CIL has reported net profit of Rs 9,622.45 crore on total income of Rs 52,592.29 crore.
My Comments:
1)CIL has the largest reserve in the world which is 19bn tonnes.
2)CIL is the lowest coal producer of the world.
3)Eq is Rs 6316 Cr
4) Sale at stake is 63.16 cr
5)Mar '10 year NP stands at 9622 cr on sales of 52,592 cr.Means NPM of roughly 18%.
6)MD Says CIL will grow at 25% this year.
7)Mcap is 1,54,751 cr.which is peanuts when we see the reserve as world largest.
Looking at the above parametres.....Coal India is an IPO of the decade......once in a life time chance....
CIL is a Navratna of India and I can't imagine that a Co having the world largest reserve of Coal can come with an IPO at just Rs 240-250.....
This is a stock one can keep it for children and grandchildren as well........
Go FOR IT.........Buy and forget type of stock.....
Rajeev,
ReplyDeleteThanks a lot for your positive opinion.
With Regards,
Vikas
Dear Rajeev,
ReplyDeleteI have read positive about this IPO everywhere.
But at one place I found totally negative about it
I am pasting the link below, if you have time please look at it and pls give us your valuable comments
http://sharegenius.blogspot.com/2010/10/avoidcoal-india-ipo.html
Regards
Pradeep
Hi Pradeep,
ReplyDeleteWell I read the link.
I think I know Mahesh Chander from MMB days and he was one of my follower there.
I don't know him personally but I use to talk with me there.
Now what I don't understand is when he says that CIL will get problem in getting rights in Assam and Bengal..
Now how is that possible?Well, if CIL is going for more land acquisition in those parts then it means that there will be additional capacity added to CIL because when it is written i IPO that CIL is having the largest reserve in the world which is 19bn tn then if CIL is going for more coal mines in those states then they will add to the reserve.
So there is no point in discussing it.
Well,I feel that CIL may go down and maynot go down.Market is market.
You can't compare with things that happened in past proves good in CIL as well......
I don't buy his any arguement....but well, CIL can go down and it can go up as well....
Thanks a lot Rajeev for your time
ReplyDeleteI have decided to go for it
Regards
Pradeep
Hi Rajeev,
ReplyDeleteI was the person who asked the query on this blog and also on mahesh's blog.
But after your instant reply I have already applied for the IPO and dont have any plans to withdraw it.
Even Parag Parikh's web-site( who is so much against IPOs) has come up with "SUBSCRIBE" rating.
As far as my personal experience with Mahesh, he is very strict analyst than me! Till now out of 10 stocks I have asked he was may be positive about only one.
Most of the times he will recommend to wait for it to go down.
This is my personal experience.
About IPO itself,(seeing the huge response by retail investors in my small town) GOD only knows how many times it will be oversubscribed and how much actual shares we get in allotement!
Lets see.
With Regards,
Vikas
Rajiv bhai
ReplyDeletei see this massage in facebook
kya woh sahi bol raha hai??????
unitech;Low floating stock ... just 9.73 % ... FIIs upped stake from 32.61 % to 34.62 % from the open market ... and now leading Mumbai bull entered the stock, watch the blast of your life upto 100 and 107 ...!!! Bulls buy 1-2 lakh shares and become millionaire very soon ...!!! Bears ... just make it clear, our sources...
ashok,
ReplyDeleteI donno about day to day trade but yes,Unitech has a very low floating stock and Realty sector is looking cheap compare to other sectors....these are all trading calls and hence I do not give much importance to them.
Hi Rajeev,
ReplyDeleteOne more place I found some different view on CIL IPO
http://blog.valuenotes.com/skeptical-investor/coal-india-ltd-cil-ipo-not-my-cup-of-tea/
Please dont think that I am trying to find negative views for your positive view :) , I just found some different view and and I gave here just for some info sharing, and I have applied to the IPO to the fullest.
And I am not expecting any of your view on above view given in link, as you already given a firm and detailed valued view above, it is just a info shared
Thanks a lot for all your write ups, I love this blog and your way of writing and analysing, it transferred me from a day trading looser to value investing winner path (Of course the journey has just began :) )
Regards
Pradeep Bhat
Hi Pradeep,
ReplyDeleteThat is Ok for me but whatever the others feel I am bullish on CIL for LT as well as on opening.It should be listed at 280 around.
This stock is like one can keep for children and grandchildren and they will remember you that their father made one good investment which gives return even after so many years.....CIL is just another ONGC....it has Oil and CIL had Coal...
Good to hear that you stopped day trading and started investing...even a small portion of inveesting community stops day trading and stop playing in F&O, the results will be seen.Just yesterday I read that the price for carryforward the trade of Nifty futures was as big as Rs 78 and for long.That is huge.....investors lose here...there is no sense in taking the long to next month at this exhorbitant rate...whole thing is complicated which can't be explained here...
But the bottomline here is NO F&O AND NO DAY TRADING...IN SIMPLE WORDS...if someone wants to make money then that is what needs to be done...
I wish you all the best...
Coal India has indeed made many many people happy and will continue to do so in years to come.Cheers !!!
ReplyDelete