The Coal India IPO has seen heavy-duty demand. India's biggest IPO has been subscribed at 11.4 times on day 3. The QIB book which closes today has seen blockbuster demand of over 24 times. The response has been quite unprecedented in Indian capital markets? history. Retail and non-institutional investors' portion got subscribed 0.79 times and 1.38 times, respectively.
The issue has seen a total demand of USD 35 billion. It has received bids for 656.15 crore equity shares as against the issue size of 63.16 crore shares. The issue will close on October 21 for retail investors, NIIs and employees.
Below is a verbatim transcript of the interview. Also watch the accompanying video.
Q: You have reason to smile today?
A: Big reason to smile for every Indian today rather than me. This is the kind of demand which you never anticipated or have kind of seen in India ever. Of course we had this kind of an inclination, indication earlier on the roadshows that the demand will be robust, but this is historical. So every Indian should be happy about this today.
Q: Institutional book has clearly far exceeded what a lot of people were expecting 24 times. Could you give us a sense of quality of investors who have come on board?
A: Almost everybody is there in the books. Long only, hedge funds, domestic institutions, banks almost every single person who invests in India is there in this book.
Q: Are you also satisfied with the kind of response that you have seen on the NII front? When you were selling this issue on the road did you get a sense that you are going to have perhaps new money, new investors coming on board?
A: Not only the NIIs, if you look at the retail lot of demat accounts have already opened in anticipation of this deal and the deal closes tomorrow. So the actual demand comes tomorrow on the NII and retail front and generally they follow the QIB portion so looking at the QIB demand one should be very hopeful that the NII demand will also be as strong.
Q: A point about retail as well, you have got one more day to go as well. Do you expect that to be subscribed perhaps once or twice? We are closing nearly at 0.8 at this point of time?
A: I cannot comment what is going to be there because of sensitivities involved. But looking at the kind of response you already got one should expect that to happen and retail gets a discount of 5%. So this is as good as a Diwali gift which the Government of India can give to the citizens of the country. So one should be very hopeful on that.
Q: We have not seen a public issue of this size in a while. There were who believed that this is going to suck the liquidity out of the market and so we have not really seen that happen, have we?
A: You?ve seen a small correction in anticipation of this deal which was expected as we spoke last time. You are talking USD 35 billion hard cash, don't forget this is hard cash which has come in rather than only 10% margin money. This shows that India can attract if there is a good deal, especially a government deal which is valued rightly, can attract you demand of USD 35 billon-50 billion, which is a very good confidence booster for India as a long term story. The government has got lined up so many deals. So this clearly tells you that your money is there at the right valuation. Nobody has ever seen this kind of money.
Q: This was definitely a good story to narrate and a good story to sell into. I want to make the point about, have you seen new investors being interested in the India story particularly in the primary markets?
A: We can see that, a lot of new names have come into the deal. That's why you get this kind of record collection. You don't get record collection with the same investors. So there is definitely a lot of new interest. It always is that a larger deal brings a lot many investors. So India needs to showcase this kind of large deals to the world which attracts this new breed of investors into the country which has happened today. So clearly if you are going to see large sized deals you are going to see more investors coming to the country.
Q: Are you hoping for a large listing pop or at least investors are hoping for that?
A: As I told you it is going to be a Diwali gift for everyone. It will list hopefully on 4th of November just a day before Diwali. So hopefully India should cheer on that day when it happens.
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