On Tuesday, the Centre announced plans to sell off 2% of Coal India Limited through an offer for sale (OFS). The sale of the stakes will be conducted via the OFS window on the BSE and NSE by the Ministry of Coal, as per an exchange filing.
Coal India stocks tumbled by as much as 6.4% at the open. The stock fell by Rs. 29.60 from its previous close level of Rs. 458.15 on the NSE. At 10:15 am, it was trading at Rs. 443, down 3.28%.
The base offer, which is expected to be the biggest, will see the government sell up to 6.162 crore equity shares, or 1% of Coal India's paid-up equity capital. Centre can sell a further 6.162 crore shares or another 1% stake via the green shoe/oversubscription option.
This implies the entire sale of the stakes would be up to 12.324 crore shares, representing 2% of the firm's paid-up capital.
The OFS will take place in two trading sessions. The window will only be open for non-retail investors on May 27. Retail investors and eligible employees will be allowed to bid on May 29, with those who opted out of bidding on the first day continuing their bidding as non-retail investors.
There is also an employee reservation portion offered. Maximum 25,000 shares are offered to the eligible employees, and each employee can bid for shares up to Rs. 5 lakh, with applicable rules and approvals.
Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla posted on X that the floor price for the OFS has been fixed at Rs. 412 per share.
“With strong operational and financial performance, consistent returns and attractive dividends, CIL continues to offer a compelling long-term investment opportunity,” Chawla added.
Before the OFS announcement, the downward move of the stock was because of its lower floor price as compared to Coal India's previous day's close.
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The decline follows that of Coal India's strong quarterly numbers in FY25 Q4. The consolidated net profit grew 11.1% year-on-year to Rs. 10,839.18 crore, from Rs. 9,751.64 crore in the same period of last year.
Further, revenue from operations rose to Rs. 46,490.03 crore from Rs. 43,961.56 crore in the previous year.
Coal India OFS is the government's second PSU stake sale of the year. The OFS sale of CBI's stake in the bank last week fetched Rs. 2,266 crore from the transaction. The divestment also coincides with the government's goal of disinvesting assets and monetising investments worth Rs. 80,000 crore by FY27.