Central Bank of India OFS: 8% stake sale May 2026

Government starts stake sale via OFS

The Government of India will begin an offer for sale (OFS) in Central Bank of India from Friday, with a base sale of 4% and an additional 4% green shoe option. Disinvestment Secretary Arunish Chawla announced the plan late Thursday in a post on X. The transaction is aimed at reducing the government’s holding in the public sector lender, where the state remains the dominant shareholder.

The OFS structure is split across investor categories. Non-retail investors can bid on May 22, 2026, while retail investors and eligible employees can participate on May 25, 2026. The government currently holds 89.27% in Central Bank of India, as disclosed by the bank for the shareholding position as on March 31, 2026.

What is being sold: 4% base and 4% green shoe

According to the OFS document referenced in the report, the government will initially sell up to 36.2 crore equity shares, representing a 4% stake in the bank. If demand is strong, it can additionally sell another 4% stake under the green shoe option. In his post, Chawla described it as an offer to disinvest 4% equity with an additional 4% as green shoe.

If the green shoe option is exercised, the transaction may fetch about ₹2,455 crore for the government, based on the stock’s closing price on Thursday, the report said. The article does not specify the closing price, but it links the estimate directly to that market price reference.

Key terms: floor price, bidding dates, and broker

The floor price for the OFS has been fixed at ₹31 per share. The OFS will open for non-retail investors on May 22, 2026. Retail investors and eligible employees can bid on May 25, 2026.

Goldman Sachs (India) Securities Pvt Ltd has been appointed as the broker for the transaction. The OFS document also notes that reservations exist for retail investors, mutual funds, and employees, indicating an allocation structure intended to broaden participation beyond large institutions.

Shareholding snapshot as of March 31, 2026

Central Bank of India disclosed that the President of India held 8,080,391,687 equity shares, representing 89.27% stake, as of March 31, 2026. This is consistent with the government’s reported holding percentage in the bank. The OFS, even at the full 8% (including green shoe), would reduce the government stake but still keep it well above the minimum levels required for management control.

The wider context is compliance with the Securities and Exchange Board of India (SEBI) minimum public shareholding requirements for listed companies. A senior finance ministry official told Informist that the government is likely to dilute its stake in Central Bank of India, UCO Bank, and Punjab & Sind Bank over the next few weeks through the OFS route, though no additional timing details were provided.

Why this matters: SEBI minimum public shareholding norm

The stated policy driver is the 25% public shareholding norm. The Informist report said Central Bank of India has 9.05 billion shares issued and outstanding. Based on the same report, the government would have to sell 1.29 billion shares for the bank to meet the public shareholding norm.

The same official also said the government approved lowering its stake through OFS in five banks at the same time, with timelines depending on market conditions. For the three banks mentioned together (Central Bank of India, UCO Bank, and Punjab & Sind Bank), the government would have to sell a total of 4.63 billion shares to comply with the 25% public shareholding norm, the report said.

How the OFS fits into a wider PSU bank dilution plan

Beyond this specific OFS, the Department of Financial Services Secretary M Nagaraju said the government is preparing to reduce stakes in other public sector banks through OFS issues as well. The plan referenced includes up to 20% stake sales in state-owned lenders such as Bank of Maharashtra, Indian Overseas Bank, UCO Bank, Central Bank of India, and Punjab & Sind Bank, aimed at meeting SEBI’s public float rule.

A separate synopsis in the provided text also said the government has appointed Goldman Sachs to manage stake reduction in four public sector banks through OFS. It added that stake sales were approved by DIPAM and that the process would involve structuring the deal and identifying potential investors, alongside execution oversight.

Timelines and routes mentioned: OFS and QIP

The broader programme also references the use of two routes: OFS and Qualified Institutional Placement (QIP). The text notes that, in FY2025-26, the government plans to raise about ₹45,000 crore through QIPs by public sector banks, while also pursuing OFS in UCO Bank, Bank of Maharashtra, Central Bank of India, Punjab & Sind Bank, and Indian Overseas Bank.

It also mentions a broader divestment and asset monetisation target of ₹47,000 crore, as part of Prime Minister Modi’s agenda, in the same context. These figures indicate that stake sales and capital market fundraising are being pursued in parallel, although the specific split between banks, routes, and timing was not detailed in the provided text.

Market impact: what investors will track immediately

For Central Bank of India, the immediate market focus will likely be on the OFS floor price of ₹31 per share, demand from institutional buyers on May 22, and the extent to which the green shoe option is used. The estimated proceeds of about ₹2,455 crore (if the green shoe is exercised) provide a reference point for the scale of the sale.

Investors will also track how this transaction aligns with the longer-term requirement to reduce government holding toward compliance with the 25% public shareholding norm. The report’s reference that 1.29 billion shares may need to be sold for Central Bank of India to meet the norm underlines that this OFS may be one step in a larger dilution path, depending on market conditions and policy decisions.

Key facts table

Public shareholding compliance snapshot (as stated)

Conclusion

The government’s Central Bank of India OFS opens first for non-retail investors on May 22, 2026, and for retail investors and eligible employees on May 25, 2026, with a floor price of ₹31 per share. The sale includes a 4% base offer and a 4% green shoe option, and is part of a broader effort to move public sector banks toward SEBI’s minimum public shareholding norm. The next clear milestone will be the demand response in the non-retail window, which will determine whether the additional 4% green shoe is exercised.