CMPDI IPO Day 3: This Coal India arm offers 37% RoE but subscription tepid, GMP slips

It is the last day to bid for the Central Mine Planning and Design Institute IPO. The issue has remained undersubscribed till the second day. The GMP for the CMPDI IPO has seen a sharp downward spiral in the last two days and is currently in the negative.

One of the key concerns is the muted subscription rate for the IPO. The issue has been subscribed to a total of 0.29 times on Day 03 so far. The retail section was booked 0.21 times, while the employee category was booked 0.12 times. The Non-Institutional Investors (NIIs) booked the issue 0.12 times. The QIBs have subscribed 0.62 times on Day 03 so far. What’s the big worry? Most analysts pointed out that this Coal India arm can be a good long-term bet.

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LIVE: CMPDI IPO Day 3: Subscription very low – GMP flat, QIB segment oversubscribed; Can institutional bidding save the issue?

Anand Rathi Research on CMPDI IPO: Subscribe for Long

The brokerage firm Anand Rathi Research has given a rating of “Subscribe”, but only to investors who have the stomach to stay for the long term.

It further said that the IPO is fully priced in at the upper price band, valuing the firm at a price-to-earnings (PE) ratio of 21.5x to its FY26 annualised earnings.

However, the brokerage house said that the firm possesses extensive expertise in executing large-scale exploration projects, backed by advanced infrastructure, cutting-edge technology, and robust technical capabilities.

The organisation’s operations are further strengthened by the strong parentage of Coal India, enabling CMPDI to deliver high-quality, reliable, and efficient solutions while maintaining leadership in the coal and mining consultancy space.

Deven Choksey Research on CMPDI IPO: IPO well-timed

Another brokerage firm, Deven Choksey Research, however, believes that the IPO is well timed, given the contemporary geopolitical scenario, placing coal back in focus. The company is currently trading at 21x FY26, with stable growth through coal and other minerals.

The brokerage house said that peer-listed consultancies (Engineers India and RITES) trade at a P/E multiple of 19.9–25.2x for FY25, but give “significantly inferior return profiles”. The listed peers have a RoE of 15% and 24%, respectively, as against CMPDI’s 37%.

“Given the current geopolitical situation, we expect coal to remain in focus in the near term & therefore CMPDIL’s monopolistic market position, superior capital efficiency, and potentially lead to premium multiples to other consultancy peers, making the timing of IPO very ideal & lucky for the company,” said Deven Choksey Research.

CMPDIL IPO snapshot

The issue will be closed today, March 24. The company wants to raise Rs 1,842.12 crore through an entirely OFS (offer for sale). The firm set the price band between Rs 163 and Rs 172 per equity share.