Central Bank of India OFS: 2.35x demand on Day 1

Strong start for the government’s stake sale

The government’s Offer for Sale (OFS) in Central Bank of India drew strong demand on its opening day, with the issue subscribed 2.35 times, according to the Department of Investment and Public Asset Management (DIPAM). The demand was largely led by non-retail participants, as May 22, 2026 was the trade day earmarked for institutional bidding. The subscription on Day 1 signalled firm appetite for the PSU lender’s shares at the offered terms. DIPAM Secretary Arunish Chawla said on X that the offer received an “enthusiastic response” and was oversubscribed 2.35 times.

What was on offer on May 22

Central Bank of India’s exchange filing said the President of India, acting through the Department of Financial Services, proposed to sell up to 36,20,56,051 equity shares. This base offer represented 4% of the bank’s total paid-up equity share capital. The base offer was scheduled for May 22, 2026, and was meant for non-retail investors.

The OFS structure also carried an Oversubscription Option, commonly referred to as the green shoe option. Under this option, the seller can sell additional shares if demand exceeds expectations, within the specified limits. In this case, the oversubscription option was for another 36,20,56,051 shares, representing an additional 4% of paid-up capital.

Government exercises the entire green shoe option

Following the Day 1 response, the government decided to exercise the entire green shoe option. This decision effectively doubled the size of the transaction from 4% to 8% of Central Bank of India’s equity. With the green shoe fully exercised, the total offer size rose to up to 72,41,12,102 equity shares, representing 8% of the bank’s total paid-up equity share capital.

The move indicates that the seller opted to use the permitted flexibility in the OFS design to monetise higher-than-expected demand. DIPAM’s communication made it clear that the additional 4% would be sold over and above the base offer.

Floor price and indicative demand numbers

The government had earlier said it would sell a 4% stake in Central Bank of India with a green shoe option of an additional 4% at a floor price of ₹31 per share. During the non-retail bidding day, institutional investors put in bids of more than ₹2,380 crore, based on reported bidding value. At an indicative price of ₹31.01 a share, the bids from non-retail investors remained above ₹2,380 crore.

Data cited for the Day 1 session showed non-retail investors bidding for over 76.86 crore shares by the close of trading hours. This compared with 32.58 crore shares on offer, implying demand of about 2.36 times in share terms, broadly matching the reported 2.35 times subscription.

Retail and employee window: key date

While May 22 was the trade day for non-retail bidding, retail investors and employees were scheduled to bid on Monday, May 25, 2026. The phased approach is typical for OFS transactions, where non-retail demand is discovered first, followed by retail participation on the next trading day as per the stated schedule.

What it means for the government’s holding

The government currently holds an 89.27% stake in Central Bank of India, as cited in the reports. If the entire 8% stake on offer is sold through the base offer and the exercised green shoe option, the government’s holding would reduce to 81.27%. This outcome reflects the arithmetic of the additional 4% offload on top of the base 4%.

Potential proceeds from the full 8% offer size

The reports noted that if the 8% stake on offer is fully subscribed, the stake sale would fetch ₹2,456 crore for the government. This figure is linked to the floor price framework and the maximum size enabled by the full green shoe exercise. The combination of strong Day 1 institutional bidding and the decision to sell the full 8% sets the base for how much capital could be raised if demand sustains through the remaining process.

Key facts at a glance

Why the OFS outcome matters for investors

The Day 1 oversubscription and the decision to exercise the green shoe option are important because they point to strong institutional participation in the stake sale. For investors tracking PSU bank supply events, the expanded offer size increases the volume of shares available through the OFS route. At the same time, the transaction clarifies the government’s intent to pare its holding, while still retaining a large majority stake post-sale if the full 8% is sold.

What to watch next

The next immediate event is the retail and employee bidding window on May 25, 2026. Investors will also watch how the final allotment aligns with the expanded 8% offer size enabled by the full green shoe exercise. Any further official updates are expected through exchange filings and DIPAM communications tied to the OFS process.