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Corporate Financing NewsGlobal Equity/DRs

State-owned Coal India, the

worlds largest coal miner,

was seeking to raise up to

$3.5 billion in the coun-

trys biggest initial public

oering, which began on

October 18. That would eas-

ily surpass the $2.46 billion

raised by Reliance Power

in its IPO in January 2008.

Proceeds rom the govern-

ments sale o a 10% stake in

the company could account

or more than a third o its

divestment target or the

current scal year, ending onMarch 31, 2011. Coal Indias

listing in Mumbai is sched-

uled or November 4.

Indias central bank said it

was prepared to oer special

liquidity-support measures to

head o a potential crunch

in the banking system due to

the cash outfow to purchase

Coal India shares. The shares

were being oered at a 5%

discount to retail investors.Coal India, based in

Kolkata, produces nearly

80% o Indias coal output.

Coal-burning power plants

produce the majority o

Indias electricity, and

demand is growing at an

11% annual rate.

Citi, Morgan Stanley,

Kotak Mahindra Capital,

Enam Securities, Deutsche

Bank and Bank o America

Merrill Lynch are managing

Coal Indias IPO.

State-run Power Grid is

expected to ollow with a

$1.9 billion share oering in

the second week o Novem-

ber. Hindustan Copper is

planning a $750 million

ollow-on stock oering.Steel Authority o India, the

countrys largest steelmaker,

is planning a $1.9 billion

ollow-on public oering

beore the end o this year.

Meanwhile, global equity

capital markets activity totaled

$506.7 billion in the rst

nine months o 2010, a 9%

decrease rom the comparable

period a year earlier, accord-

ing to Thomson Reuters.This was despite China-

based AgBanks $22.1 billion

record-breaking IPO and

the worlds largest ollow-on

oering o $66.8 billion rom

Brazil-based Petrobras, which

helped make the third quarter

the biggest or global equity

issues since the ourth quarter

o 2009.

Global IPO volume or

the rst three quarters o

2010 o $146.6 billion

marked the strongest nine-

month period or IPOs

since 2007. Issuers rom

emerging markets have

raised $92 billion so ar this

year, accounting or 62% o

IPO volume.

Chinas volume more thandoubled rom a year earlier

and accounted or 20% o

the total in the rst three

quarters o this year. China-

based IPOs have been among

some o the best perormers

in the US market recently,

according to Renaissance

Capital. Online real-estate

portal SouFun rose 52% in

its rst day o trading. Fast-

ood restaurant chain Coun-try Style Cooking rose 68%

in its debut, and Internet

content delivery network

ChinaCache gained 74%.

The China Securities

Regulatory Commission

plans to implement new

rules this month that will

improve the pricing o IPOs

on its stock exchanges. Issu-

ers and underwriters will be

required to disclose prices

quoted by potential investors

during the pre-marketing o

share issues.

China-based companies

raised more than $40 billion

through IPOs in the third

quarter, accounting or 76%

o the global total, accord-

ing to Ernst & Young. TheShanghai Stock Exchange

plans to open a new interna-

tional board next year, with

dozens o oreign companies

waiting to list in Shanghai,

including some China-based

companies that are currently

listed in Hong Kong.

Meanwhile, in the US IPO

market, the trend in year-

to-date statistics or both

volume and value are a clearindication o a strengthening

market, says Scott Gehsmann,

capital markets partner with

PwC Transaction Services.

The rapid increase in deal

volume, both successul IPOs

and pipeline growth, coupled

with a decline in average deal

size, suggests we may still be

building a base, he says.

Capital raised in the US

IPO market in the rst threequarters o this year totaled

$14.1 billion rom 99 IPOs,

compared with $8.1 billion

rom 34 oerings in the same

period o 2009.

Some 67 companies

entered the IPO registra-

tion process during the third

quarter, and a number o

these could become the big-

gest deals o 2010, PwC says.

Gordon Platt

Coal Indias IPO Is Countrys Biggest

Sep30,

2009

Oct9,

2009

O

ct23,

2009

Nov6,

2009

N

ov20,

2009

N

ov30,

2009

Dec11,

2009

D

ec24,

2009

Jan8,

2010

J

an22,

2010

Feb5,

2010

Feb19,

2010

Mar5,

2010

Mar19,

2010

Mar31,

2010

Apr16,

2010

A

pr30,

2010

M

ay14,

2010

M

ay28,

2010

Jun11,

2010

J

un25,

2010

Jul2,

2010

Jul16,

2010

Jul30,

2010

Aug13,

2010

Aug27,

2010

Sep3,

2010

Sep17,

2010

S

ep30,

2010

80

100

120

140

160

Latin America Europe Asia

Source: BNY Mellon

Regional ADR Indexes

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