I was not surprised by the 17 times over-subscription of Coal India Ltd. Given by the reserves (Biggest reserves in the world), the valuation was bit of a tough task. Even the company had a huge cash in hand.
Some 2 months ago before the deal, I calculated that the cash in hand per share would be around Rs.40 per share. Though I was not sure about the exact valuations, but analyst were quoting around Rs. 300 in contrast to highest band price of Rs. 245
This brings a critical issue in privitisation of the PSU's in India. Is the Indian Govt giving away a lot of assets too cheap??
EIL and others were not so exciting as markets were not so buoyant in 2009. Next in line - IOC, PGCIL. I would place my bets for PGCIL - Power sector is going to have a good boost in coming years.
IOC will still suffer from existing price restrictions on retail fuel prices in India.
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