Central Bank of India OFS 2026: ₹31 floor sparks 6% fall

Stock slides as OFS details hit the market

Shares of Central Bank of India Ltd fell sharply in Friday’s trade after the government announced an offer for sale (OFS) with a discounted floor price. The stock was reported down as much as 6% in early deals. On NSE, the floor price of ₹31 per share was set at an 8.66% discount to Thursday’s close of ₹33.94. The stock also hit an intraday low of ₹31.89, a fall of 5.95% during the session. On BSE, the share price was reported to have touched ₹31.85 at the day’s low. The price action kept the PSU bank in focus as traders reacted to the supply expected from the stake sale.

What the government is selling through the OFS

The government plans to sell 4% equity in Central Bank of India through the OFS, according to the Department of Investment and Public Asset Management (DIPAM). It also has a “green shoe” option to sell an additional 4%, taking the total potential sale to up to 8%. DIPAM’s official notice fixed the OFS floor price at ₹31 per equity share. Because the floor price is materially below the previous close, the announcement immediately set a lower reference point for bids. The transaction is structured as a two-day OFS, widening participation across investor categories. For market participants, the key variable is how much of the additional 4% green shoe is exercised based on demand.

Key dates: non-retail first, retail later

The OFS opens for non-retail investors on May 22, 2026. It opens for retail investors on May 25, 2026. The staggered schedule is standard for Indian OFS transactions and is meant to manage order flow across categories. The discounted floor price can attract institutional interest, but it can also pressure the secondary market price during the offer period. Retail participation will be watched closely given the stock’s recent volatility. The issue’s final outcome will depend on bids received at or above the floor price.

Why this stake sale matters: SEBI’s public shareholding rule

The government’s OFS move comes as it is required to reduce its holding to comply with minimum public shareholding norms. The norms mandate listed companies to maintain at least 25% public shareholding. The government held 8,08,03,91,687 shares, or an 89.27% stake, in Central Bank of India, as cited in the report. To meet the 25% public float requirement, the government needs to bring its stake down to 75%. That context explains why the government is using a market-based route like an OFS. The size of the holding also means further stake reduction steps may be needed over time to reach the 75% level.

Recent performance: YTD drop and a weak quarterly profit print

Central Bank of India stock has fallen 15.13% in 2026 so far, as stated in the report. The stock also declined recently after the bank’s March quarter net profit fell 29.91% year-on-year to ₹724.43 crore, according to data compiled from the corporate database AceEquity. The quarterly profit decline added to investor caution even before the OFS announcement. Separately, the report also noted that over the last one year, the stock was down about 12%. These figures framed the OFS announcement against an already soft performance trend.

Where the stock stands in its 52-week range

The report cited a 52-week high of ₹41.18 and a 52-week low of ₹31.29 for Central Bank of India shares. Friday’s lows near ₹31.85-₹31.89 placed the stock close to its 52-week bottom. That proximity can influence short-term trading behaviour because technical levels tend to draw attention when prices revisit recent extremes. It also underscores why the discounted floor price had an immediate impact on sentiment. Investors tracking the 52-week range will likely watch whether the stock stabilises above the prior low of ₹31.29.

Broader market context: PSU bank index under pressure

The selling was not limited to one stock. The Nifty PSU Bank index fell 1.40% to 8,797.20, as stated in the report. Several large PSU banks declined on the day, including Canara Bank (down 1.49%), Punjab National Bank (down 1.47%), State Bank of India (down 1.43%), Bank of Baroda (down 1.34%), and Union Bank of India (down 1.32%). Indian Bank (down 1.1%), UCO Bank (down 0.7%), Bank of India (down 0.68%), and Indian Overseas Bank (down 0.66%) were also lower. The list indicates broader risk-off positioning in the sector during the session.

Earlier volatility trigger: Budget-linked borrowing fears

The report also referenced a previous episode of sharp selling in PSU banks after the Union Budget 2026 presentation. According to the report, the Centre announced plans to borrow a record ₹17.2 trillion (₹17.2 lakh crore) from the market in FY2026-27. The reported concern was that higher borrowing could push bond yields up, which can be negative for PSU banks due to mark-to-market losses on bond portfolios held in treasury books. The report noted that with bond markets shut on Budget day while equities remained open, investors appeared to price the risk aggressively. While separate from the OFS, this backdrop matters because it shows the sector has been sensitive to policy and macro signals.

Key facts at a glance

Market impact and what investors will track next

The immediate market impact was a sharp fall in the stock price toward the OFS floor, reflecting the discounted offer level and expected increase in floating supply. The government’s stake reduction is directly linked to SEBI’s minimum public shareholding requirement, making the transaction more compliance-driven than discretionary. Investors will track subscription levels across non-retail and retail windows, and whether the additional 4% green shoe is exercised. The stock’s proximity to its 52-week low may also keep volatility elevated during the OFS period. Beyond the OFS, the market will continue to weigh the bank’s profitability trend after the 29.91% YoY drop in March-quarter net profit.

Conclusion

Central Bank of India shares weakened after the government announced an OFS at a ₹31 floor price, an 8.66% discount to the prior NSE close. The offer, which begins with non-retail participation on May 22, 2026 and opens for retail investors on May 25, 2026, is part of the government’s plan to reduce its stake toward the 75% level required under public shareholding norms.