Coal India: Will it dip below IPO price?

Investors will be keenly watching the price movements of Coal India, which hit a new low of Rs 250 on Friday. As the company posted 16.5 per cent drop in net profit at Rs 3,731 crore for the first quarter ended June 30, 2013 as against the same period last year, investors are worried that the weak performance may drag the stock below its public issue price of Rs 240. Lower average realisation and an inflationary pressure on fuel and wage costs dragged Coal India’s Q1 performance. The stock had registered its all-time high of Rs 422 in May 2011 but has been on the decline since then. With the Government keen to divest further 5 per cent stake in the company, it would be interesting to know whether the fall would get aggravated further.