Govt To Sell Up To 3% Stake In Coal India Through OFS At Discounted Price

The floor price for the offer is set at Rs 225, which is a 6.7 per cent discount on Wednesday’s closing price of Rs 241.20 on the BSE. It is anticipated that Coal India will raise up to Rs 4,000 crore

State-owned Coal India Ltd is set to launch a two-day offer-for-sale (OFS) starting Thursday, with the government planning to sell up to a 3 per cent stake. According to an exchange filing by the PSU on Wednesday, the Offer for Sale (OFS) will be open for retail and non-retail investors on June 1 and 2.

The floor price for the offer is set at Rs 225, which is a 6.7 per cent discount on Wednesday’s closing price of Rs 241.20 on the BSE. It is anticipated that Coal India will raise up to Rs 4,000 crore by selling approximately 18.5 crore shares.

The proposal is to offload 9.24 crore shares, amounting to a stake of 1.5 per cent in the coal producer. Besides, there will be a green shoe option for selling an equal amount of stake in case of over-subscription, according to a regulatory filing.

"The seller proposes to sell up to 9,24,40,924 equity shares of face value of Rs 10 each of the company (representing 1.50 per cent of the total paid-up equity share capital of the company) (base offer size), on June 1st and 2nd for retail investors and non-retail investors," the filing said.

There will be an option to additionally sell 9,24,40,924 (1.50 per cent) equity shares of the company, it added. 

This OFS is part of the government's strategy to divest its stake in public sector undertakings, as it currently holds a 66.2 per cent stake in the coal producer.

On Thursday, the OFS will open for subscriptions for non-retail investors only. These investors, while placing their bids, can flag their willingness to carry forward their unallotted bids to T+1 day for allocation to them in case the retail category stays unsubscribed. SBICAP Securities Limited will be the broker for the OFS. 

In the current financial year, the government aims to raise Rs 1.75 lakh crore through divestment in public sector undertakings (PSUs).

In November last year, Bloomberg reported that the government plans to sell 5-10 per cent of Coal India, Hindustan Zinc, and Rashtriya Chemical and Fertilisers.