Strong fundamentals, high investor interest and valuation estimates indicate good listing gains for the Coal India stock, say experts. If market pundits are to be believed, the company’s stock could list at Rs 260-270 (12-15 per cent higher than the Rs 232.7 allotment price for retail investors) and could even shoot up to Rs 300 levels intra-day on Thursday. Fair value On the discounted cash flow method, too, which most analysts are using to value Coal India’s stock, its value per share works out to Rs 300-310, which is encouraging.
Though analysts value the stock using different methods, on average the fair value of Coal India works out to around Rs 310 per share, which from the retail investors’ perspective (who have been allotted shares at Rs 232.75, considering 5 per cent discount) means over 33 per cent returns.
"If investors have a short-term view, probably they can book profits at Rs 280-290 levels, where the stock will be fully priced," says Baliga. "One should not panic at the Rs 260-270 levels. For instance, if an investor sells half of its holding at Rs 290 per share and later manages to buy at Rs 270, the cost of purchase will come down to Rs 223 per share.
The reserved portion of QIBs was subscribed 24.7 times, non-institutional investors 25.4 times and retail 2.31 times while employees' portion was subscribed just 0.1 time. Coal India had set itself a target of production of 203 million tonnes of coal in April-September. The shortfall in production is estimated to be 18 million tonnes of Coal.