New Delhi: In the first big ticket disinvestment of the current fiscal Coal India share sale kicked off for a smooth sail Wednesday as institutional investors put in bids worth Rs 4,300 crore and over-subscribed the shares reserved for them.

Of the 14.89 crore share on offer, institutional investors put in bids for 15.84 crore shares or 1.06 times the shares reserved for institutional buyers, as per data available with NSE.

Officials said the domestic mutual funds and insurance companies invested heavily in the offer for sale (OFS) on Wednesday, which was the first day of the two day share sale.

"Bids worth Rs 4,300 crore has been put by institutional buyers," officials said.

The share sale will on Thursday open for retail investors, who would be offered a 5 per cent discount. These investors can bid for shares worth up to Rs 2 lakh.

The government is selling over 18.62 crore shares or 3 per cent in Coal India Ltd (CIL) at a floor price of Rs 266 apiece. If fully subscribed, it will fetch the government Rs 5,000 crore.

"A Rs 5,000 crore successful OFS in this volatile and subdued market will help in uplifting investor sentiment in broader market," officials said.

Coal India scrip slipped to a low of Rs 263.80 apiece during intra-day trade. The scrip closed down 3.73 per cent over previous close on the BSE at Rs 265.60 -- below the floor price of the OFS.

The BSE benchmark Sensex ended 550.92 points up at 34,442.

On top of the 3 per cent stake sale, the government also has an option to retain an over-subscription of another 6 per cent stake in the CIL OFS.

If the additional 6 per cent stake or 37.24 crore shares are put on the block, then the government could get a further about Rs 10,000 crore. Taken together, the 9 per cent stake sale in CIL could fetch around Rs 15,000 crore to the government.

The floor price of Rs 266 a share was at a discount of nearly 4 per cent or Rs 11 a share over Tuesday's closing price of CIL scrip on the NSE.

The government had last sold 10 per cent stake in CIL through an OFS in January 2015. It had then mopped up about Rs 23,000 crore.

The government currently holds 78.32 per cent stake in Coal India.

It has already raised over Rs 10,028 crore through PSU stake sale, including by way of follow on offer of Bharat-22 ETF, and initial public offering of four PSUs -- RITES, IRCON, Mishra Dhatu Nigam Ltd (MIDHANI) and Garden Reach Shipbuilders.

The stake sale in Coal India will help the government move forward towards the Rs 80,000 crore disinvestment target in current fiscal.