Coal India IPO Soaks Liquidity in Mumbai Trading

Chandrasekhar Atreya
22 Oct, 2010
New York City

Mumbai benchmark index closed lower on Friday but gained 0.2% for the week. Coal India offering is oversubscribed fifteen times. Infosys plans to invest $100 million in China expansion.

[R]5:00 PM Mumbai – Mumbai benchmark index closed lower on Friday but gained 0.2% for the week. Coal India offering is oversubscribed fifteen times. Infosys plans to invest $100 million in China expansion.[/R]

In a choppy trading on Friday, Mumbai shares dropped pushing the benchmark index nearly 0.5% down.

The BSE Sensex fell 0.47% or 94.72 points to close at 20,165.86 but closed 0.2% higher for the week. The CNX Nifty on the National Stock Exchange fell 35.45 points to close at 6,066.05.

Rupee continued to trade weaker on Friday tracking a choppy domestic share market and after concerns of foreigners repatriating funds post Coal India’s share allotment.

The rupee closed at Rs 44.32 to a U.S. dollar at Mumbai.

Revenue Secretary Sunil Mitra told Times of India Friday that going by the buoyancy in tax collections, total revenue of India in the current fiscal year would exceed the government’s budgetary target.

“We expect to exceed the revenue target modestly. The growth in revenue is triggered by exceptional growth on the direct tax front, led by customs duty. The robust growth in collection is continuing even in October,” Mitra added.

London-listed Vedanta Resources said Friday it was optimistic New Delhi would eventually approve expansion of the company’s alumina refinery in Orissa, a day after the application was rejected.

Coal India IPO was more than 15 times subscribed, has been asked by the capital markets regulator to offer investors an exit option until October 25 after errors were pointed out in the prospectus, the state-run company’s Chairman Partha Bhattacharya said.

The prospectus contains certain typographical errors in financials.

The tax dispute with telecom Vodafone Essar, has not restricted foreign fund inflows into India, which, on the contrary, increased substantially, a top Income Tax official said Friday.

“The issue of Vodafone has not impacted foreign funds inflow,” Central Board of Direct Taxes Chairman, S. S. N. Moorthy told reporters on the sidelines of an event in Mumbai on Friday.

World Bank pared China’s growth forecast for 2011 to 8.5%, just a shade below its projection of 8.6% for India, the fastest economic growth estimate in the world.

When Coal India lists on the BSE and NSE on November 4, just ahead of Diwali, it will almost certainly climb to be among the top 10 valued companies in India.

Since Coal India stock was very attractively priced at a band of Rs 225 to Rs 245, dealers expect a 25% to 30% premium on the listing day. If the price takes a value of Rs 300 the company’s market cap will be about Rs 1.89 lakh crore, in the top ten most valued companies in India.

Infosys is looking at investing around $100 million in its China operations over a period of time and also increase staff to 4,000 from the existing 2,850, according to chief executive S. Gopalakrishnan.