Can the Coal India IPO, the country’s biggest, hamper the rally, like Reliance Power did in 2008?
Coal India alone cannot create problems. It is a gigantic enterprise and the IPO will be well received if priced well. Coal is a precious commodity globally and the IPO will generate interest. There will be some post-listing gains too. But I hope the offer has some money for retail investors; 5-10 per cent will be reasonable. If retail investors make money in the IPO, they will buy most of the following issues. The real concern will emerge six months down the lane, when there will be a flood of IPOs and the public sector dilution programme is in full gear. It will tend to put the markets on the higher bottom mark, which means we won’t be able to cross a certain level. The markets are hungry for quality issues and Coal India is the only big one from the government stable. In the current situation, is there substance in talks of a douple-dip recession? Recovery in the US is weak. But the Dow is showing a different kind of strength and seems to have priced in a recovery. Also, Warran Buff
