Coal India Limited IPO Message Board (Page 137)

which company now plan to come in primary market????

Dear SJ and Ravi
please note that risk with respect to pricing is that CIL mostly has long term contracts with the state electricity boards. And to that extent, it will find it very difficult to pass on any major price rise to the latter, and thus the benefits of the same profit. ( around of 90% coal produced is purchased by these state EB)

Overall, CIL will continue to face regulatory hurdles on the pricing front. In a country where vote bank politics leads the government to distribute free power, and the state electricity boards already reeling under losses, why would they be ready to pay more for power that will be produced using expensive coal? So indirectly, CIL's pricing will continue to remain low and not rise as rapidly as is expected during these heady times of the IPO.
So there is no question to increase the coal price at all.Only you can increase the production but not price.

RAJKOT ME 31+12.5 ME SODE HO RAHE HE

1476
your figures are half correct

Latest Portion: Retail fully subscribed (1.1 times)
Exact figures of retail portion would come late night

coal india expected retail 3.5-4 times

Till 7 pm retail portion around .9 times subscriber. Don't think it will be subscribed fully in retail.

What a beutiful analysis SJ.That is great.Now tell us in simple words: Apply or Avoid.Please respond.

Dear Friends,

Here are some facts about CIL.

Reliance power oversubscribed by 74 times. But due to margin money in front reliance power collected approx Rs 75000 crore.

Coal India collected Rs 120000 crore from FII only. Overall collected more then Rs 180000 crore. And mind well this is full payment. Not margin money.

Simply blockbuster subscription beyond anybody's imagination.

Regards,
Vishal

Ravi Bangalore

With due respect

Utility companies trade at 20x is right.

The term "Utility" covers a wide spectrum of sector Industries.


This company ...Coal India i.e. one of those Utilities as you already said.


Plz do not say that Coal India is cheap compared to Utlitiy Companies.


Coal India can only be compared with Coal Companies or Companies Worldwide

Comparing with other Global Companies It is in line at 15 times with what a Peabody Energy or Bhumi Resources is trading at and hence it is issued at fair price.If you were to look at it from an EV/EDITDA prospective, then it is certainly more than 30% or 40% cheaper vis-à-vis some of its global peers trading at about 6 to 6.5 times whereas the global average to EV/EDITDA basis for likewise companies stands at a steep 12-13 times. So clearly valuations seem to be on its side.

Now here is the catch Ravi and take note of the points mentioned below carefully:-

The reason why Coal India sells its coal at a 50-60% discount to what the global prices are at is simply because only 18% of the coal that it produces is top quality, ‘A’ grade coal.In fact, out of the odd 432 million tonne that it currently produces, only about 40 million tonne is washed coal. That is the coal that commands prices which are in line with international prices. The rest of the coal which is non-beneficiated coal does not command any premium and hence deserves to trade at prices that it trades at.Until and unless they add these 20 washeries which is the highlight of their IPO documents and until and unless the washed coal increases from the current 15% or 18% of the overall coal production, there i no point in such an advantage of fair price.

It would be unfair to say - the moment Coal India can sell its entire coal at international prices, if that was to happen the stock should trade at Rs 1,000 a share which means it should get a valuation of Rs 600,000 crore.

But as mentioned earlier that i not the case.....!! As is clear from the paragraph before the last one above this sentence.

Two of Coal India’s subsidiaries - Bharat Coking Coal and Eastern Coal Fields Limited, both of which have accumulated losses to the tune of Rs 5,000 crore each. These losses are not going to rush away in a hurry. While Bharat Coking Coal might come out of the BIFR in the next 24 months, Eastern Coal Fields is likely not going to see profitability before the next four-five years. This will weigh down on the balance sheet not to take away credit from the fact that it has cash plus bank balances to the tune of Rs 38,000 crore.

There are a lot of things going for it financially - 24% on operating margins, return on equity (ROE) close to 30% going forward.

Where it really lacking is the fact that the coal that it produces will continue to trade at a discount to its international peers for the reasons mentioned above. On the back of that, even trading PE of 15-16 times is not justified.

So Ravi

This company is making profit after tax (PAT) of USD 220 million. There is a Peabody Energy which makes PAT of close to USD 480 million. Bhumi Resources makes PAT of USD 400 million. They deserve to trade at premium valuations and Coal India with a 30-40% discount in terms of profitability cannot command the same valuations.




Plus Points:

1)Proxy to India's Power Play as Coal as a commodity which is essential for growth next 5 years and power companies are going gung ho and the power ministries to acquire coal resources.

Power as I said earlier while commenting on Tecpro that:--

"If Infrastructure and Construction and Real Estate where the leaders of the last bull market Power whether Thermal Wind Solar Bio-Mass Hydel Nuclear and some yet to be fully researched technologies like Zero point Technology Electric and Anti-Matter will be etc. will be the leader of the next bull market not only in India but throughout the world."

2) Coal India being one of the leaders of Coal Mines as 2/3rds of World Production of Coal come from Asia will always enjoy some scarcity premium. Hence it will enjoy good premium and as visible by todays QIB Book and Overall subscription today.

3)It has 30,000 crores of Surplus cash in its balance sheet and add to it 15,000 crore additional surplus cash from IPO which will go to government entirely as it is a Disinvetment or partially or fully go to the Company that is yet to be seen..!! This Surplus Cash it may choose to invest in acquiring a International Company which has high Grade Coal

4) There is a myth that Crude Oil is the only practically Valuable commodity. The fact is that it's lesser known Cousin Coal is as valauble a commodity as Crude Oil. this fact you also might be knowing.

5) Backed by the Government now whu is planning to give it "Maharatna" status it Aim's to be the leading Coal Company WOrldwide and expand abroad and have monopoly.

6) As i mentioned previously in other boards India is set to surpass GDP growth rate of China pretty soon...!! Also the per capita income will double in next 5 years and So will be The Human Development index and the GDP is set to double by 2016 from 1.3 trillion dollar currently to 3 trillion dollars. So consumptions for commodities will till be huge in India.

Ravi Bangalore my freind these are some other Concerns:

1) Indian Power Companies are investing abroad to Aquire High quality Captive Coal Mines. Now if Coal India's Coal was so superior Grade what was the need for them to go abroad and acquire coal companies abroad

2) Coal India's mines are in Jharkhand area and many other areas which are Naxalite areas and hence mining can stop temporarily or cease for 4-5 years if a Big Naxalite Movement i tarted in future which already started there.!!... Same is the Risk Factor for a company like OMDC but OMDC i trading at 1/10th price of Sesa Goa (in term of Market Cap) and has twice as big mines than Sesa Goa. So in OMDC which is a 90 year OLD Gold Mine
(I am using the term Gold Mine and Not Mineral Mine although it has other minerals and not Gold but it is a practically a Gold Mine..loll)
So OMDC is not directly comparable with Coal India.

3) Other places where Coal is needed is steel and other Industrial Uses. Just today the MD of Jai Balaji Steel Mr. Jajodia came and said that they are acquiring a Captive Coal Mine and to ue for their own purpose and not for sale. So why didnt they buy Coal from Coal India's Coal:--

Because A) it i Backward Integration and reduces input cost of teel production and B)Coal is of superior quality.

4)As I just mentioned above Coal India's Cash Surplus is 30,000 crores. Now even if they acquire some Foreign Company in Future that process will take another 3 years and the benefits of Superior Quality coal will start acqruing only from 2014 and beyond and fully after 2017.

5) Commodity stock during Upcycles or Boom Worldwide trade at 16-17 pe and in Downcycles also trade at 3 PE to 4 PE. Now averaging thee concern out and also Global Macro Economic Environment currently any time there can be a worldwide soveregnity debt crisis. Commodity stocks are not recession proof like Microfinance or FMCGs or Retail

6) People say Coal is scarce commodity and will only last the next 40 years. Then tell me how come new discoveries are made everyday the deeper we get into the Eraths's Crust. Agreed that going that deep is not cheap but in 40 years it will become cheap on per unit basis. How come Shale Gas has become the next big thing and Crude from existing refineries is not..!! The fact is that this is just government propganda to loot the general public as they dont want Crude Oil companies to go bankrupt....!!

7)Coal India is a behemoth of Corruption. If you do not believ me Ravi and you believe yourself and brokerage reports that themelves base reports on Company interviews and DRHP and Crisil reports then please Contact Shreedhar whu is also a PSU employee in a big position in a big telecom company in India.

8) Government's decision to share 26% plus of Mining Profits if implemented in future although will stop illegal Mining but also leave a dent in Coal Mining Companie Blance Sheet. Plus the corrput Coal India employess and GOI politicians who themselves give illegal mining liscences and permissions to these mining contractors and make a big buck. If you think there is no Corruption then Go and see the Movie "Akrosh" starring Sanjay Dutt running in a Multiplex near You.


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BOARDERS This is not my ANaLYSIS AND I AM NOT SAYING SUBSCRIBE OR DONT SUBSCRIBE
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Which i will not say and may be abused for that. But i will keep my word that i will not post any analysis on Chittorgarh till coal India Ends as per my war declared against ANonymus

Lets see which guy comes on this board and gives his personal analysis and does not copy paste other brokerage reports and claims himself as an expert.

I am no expert but I also do not fully believe in Brokerage Reports which I call "Boutique Houses" and Not Brokers or Analysts true to their metal. Yes there are some very good ones even in that dirt but those people are not covered much often by our OH SO COOL AND HEPPENING CNBC.

I will be mailing my analysis report after working 5 hard days till 3 AM in the morning.

By today night which you may read at night or Early morning and then subscribe as there are still 30+ hours left as of now


SO I AM NOT BE BLAMED FOR ANY BODY'S LOSS OR ANYONES DECISION TO AVOID BASED ON MY POST

AS I HAVE ALREADY SAID ABOVE

Regards

And Best Of luck

Setu (Sj)

P.S. Anyone who is not in contact with me can contact me by viewing my public profile for Coal india Analysis

1471
the details are of NSE details
whereas total figure (NSE+BSE)
Exact details would come late night

Current portion: Retail portion fully subscribed

COAL INDIA LIMITED - NSE Bid Details                        
Updated as on 20 October 2010 at 1900 hrs                        
Sr.No.      Category      No.of shares offered/reserved      No. of shares bid for      No. of times of total meant for the category
1      Qualified Institutional Buyers (QIBs)       284236398      6379692800      22.45
1(a)      Foreign Institutional Investors (FIIs)            4672890850      
1(b)      Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies)            1459425700      
1(c)      Mutual Funds            238102375      
1(d)      Others            9273875      
2      Non Institutional Investors      85270919      82155700      0.96
2(a)      Corporates            38614950      
2(b)      Individuals (Other than RIIs)            39143350      
2(c)      Others            4397400      
3      Retail Individual Investors (RIIs)      198965479      128183400      0.64
3(a)      Cut Off            89861850      
3(b)      Price Bids             38321550      
4      Employee Reservation      63163644      1259200      0.02
4(a)      Cut Off            1159900      
4(b)      Price Bids             99300      

Looking at current figures
Retail portion would subscribe 2 times
Maximum retail allotment 200 share

I WANT TO SALE 4 APPLICATION IN Rs.5000/- EACH ANY BUYER?

COAL INDIA APPLICATION PRICE 7000-AHEMDABAD

631636440      100%      
BSE Bid Quantity
Bid figures are inclusive of optional bidding quantity       831810050       131.69%      


Total Issue Size      631636440
Total Bids Received      6591466675
Total Bids Received at Cut-off Price      91195125
No. of times issue is subscribed      10.44
Graph Logic

11.75555555555555555555
timeeeeeeeeeeeeeeeeeeeee

MY NAME IS COAL INDIA LTD

latest application price:

sell 2 application rs.5000 today

Coal Ministry discusses new Mining Bill

The draft Mines and Minerals Bill proposes to offer 26 per cent profit or 10 per cent loyalty from the mining activity, whichever is higher.

http://smartinvestor.in/market/ipoNews-45814-Coal_Ministry_discusses_new_Mining_Bill.htm

34% CAGR captures negatives like corruption, low-quality coal etc. However, it has not factored-in 26% profit sharing. In other words, 34% - 26% = 8% PAT growth if mining bill becomes law.

But, still I apply & sell in first 10 minutes of listing.

how many time subscribe retails update