Coal India's IPO lifts privatisation proceeds to record high

The completion of Coal India’s initial public offering earlier this week has pushed the volume of Indian government share sales this year to a record $8.3 billion, more than four times the $1.8 billion raised from two issues in 2009, data provided by Dealogic show.

And further sales are expected in the coming two months, including a further sell-down by the government in Power Grid Corp and an IPO of Manganese Ore India.

Coal India raised Rs154.75 billion ($3.46 billion) after strong demand from both institutional investors, and corporate and high-net-worth individuals allowed the price to be fixed at the top of the range. The deal was the largest IPO in India ever, ahead of Reliance Power’s $3 billion offering in January 2008.

All the shares on offer where secondary shares sold by the government and the deal reduced the government’s stake in the country’s largest coal miner from 100% to 90%. Aside from helping to boost the government’s coffers, the sizeable deal also pushed this year’s stock privatisation volume from the four Bric nations (Brazil, Russia, India and China) to $55.1 billion, more than twice the $24.7 billion raised in 2009 from 26 issues. China accounts for about 75% of this year’s total, while India makes up 15% and Brazil 10%.

The Coal India offering also pushed the total IPO volume in India so far this year to $9.6 billion, just shy of the record $9.7 billion raised from new listings in 2007. At $26 billion, the volume of total equity issuance, including equity-linked deals, is still well below the $34 billion raised in 2007, however.