Street divided on Coal India

The wait for Coal India’s initial public offer (IPO) pricing is finally over, with the government announcing a price band of Rs 225-245, which values the company at Rs 1,54,752 crore at the upper price band. However, the pricing has come as a surprise, and the Street seems divided on this.



While the pricing is slightly higher than what most analysts had projected earlier, a few had also pegged the company’s value at Rs 234-344 per share, based on different valuation methods.

Last month, most experts and analysts had estimated the IPO to be priced in the range of Rs 200-220. Even after considering that the market (Sensex) has risen 4 per cent since then, the final pricing at Rs 225-245 appears to be higher. At this pricing, the stock’s PE works out to 14.4-15.7 times the company’s 2009-10 consolidated earnings.

“The issue is aggressively priced. It would have helped in attracting retail investors if the price had been in the region of Rs 200 a share,” said Mayank Shah, chief executive officer at Anagram Capital.

More @ via Business Standard