Coal India IPO twice oversubscribed on day three

MUMBAI, October 20, 2010 (AFP) – India’s 3.5-billion-dollar sale of shares in state-run Coal India was doubly oversubscribed a day ahead of the close of the country’s biggest ever stock offer, stock exchange figures showed Wednesday. Bids had been received for 1.29 billion shares — 2.05 times the number up for grabs.

Coal India’s initial public offering (IPO), which opened Monday, allows foreign and retail investors to buy into the resource behemoth, which produces 80 percent of India’s coal.

Most bids were at the higher end of the price band of 225-245 rupees (5.0 to 5.5 dollars) a share, exchange data showed.

“We’re continuing to see a strong response,” an investment banker close to the share issue told AFP on condition of anonymity.

Demand has been heaviest from financial institutions, which have bid for over three times the shares on offer, he said. Small investors have taken up 35 percent of the shares allocated to them, another banker said.

The offer closes Wednesday for financial institutions and on Thursday for retail investors. Analysts expect institutional demand to make up for any shortfall in retail demand.

Employees have shunned the share issue, bidding for less than one percent