Central Bank of India OFS: Govt sells up to 8% in 2026

Central Bank of India OFS begins Friday

The Government of India will start an offer for sale (OFS) in Central Bank of India on Friday, with a base sale of 4% and an additional 4% green shoe option. Disinvestment Secretary Arunish Chawla announced the transaction late Thursday in a post on X, indicating that the Centre is looking to pare its holding in the public sector lender through the market route. Central Bank of India shares are expected to remain in focus as the sale opens for institutional demand discovery first. The move also fits into the government’s wider effort to bring public sector banks closer to the minimum public shareholding requirement.

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

According to the OFS document referenced in the report, the government will initially sell up to 36,20,56,051 equity shares, representing 4% stake in Central Bank of India. A further 4% stake can be sold if the green shoe option is exercised, typically used when demand exceeds the base offer. Chawla’s post described the structure as a 4% disinvestment with an additional 4% available through the green shoe. The government currently holds 89.27% in the bank, as stated in the update.

Floor price set at ₹31 per share

The floor price for the OFS has been fixed at ₹31 per share. This floor price is the minimum price at which bids can be placed in the OFS window. The expected proceeds from the transaction, if the green shoe option is exercised, were estimated at around ₹2,455 crore based on the closing price of the stock on Thursday, as reported. While the final realisation depends on demand and clearing price, the floor provides an initial reference for institutional and retail participants.

OFS schedule: non-retail first, retail on Monday

The OFS will open for bids from non-retail investors on May 22, 2026. Retail investors and eligible employees can participate on May 25, 2026. This two-day structure is standard for many OFS transactions, with the first day used to gauge institutional appetite and the second day enabling retail participation. The report also notes that reservations exist for retail investors, mutual funds, and employees, based on the OFS document.

Broker and execution details

Goldman Sachs (India) Securities Pvt Ltd has been appointed as the broker for the OFS. In large disinvestment transactions, the appointed broker facilitates bid collection and order flow during the OFS window. The appointment signals that the government has moved from preparatory steps to execution on an announced timetable.

Promoter holding and disclosure: 89.27% as of March 31, 2026

Central Bank of India reported that the President of India held 8,080,391,687 equity shares, representing 89.27% stake, as on March 31, 2026. The bank also disclosed that no encumbrances were created by the promoter during FY26, meeting disclosure requirements under SEBI’s Substantial Acquisition regulations, as stated in the report. These details matter for investors tracking free float, supply of shares, and compliance-related selling.

Why stake sales matter: minimum public shareholding norm

A senior finance ministry official told Informist that the government is likely to dilute stakes in three public sector banks, Central Bank of India, UCO Bank, and Punjab & Sind Bank, through the OFS route “over the next few weeks” to help meet SEBI’s minimum public shareholding norm. The official also said the government approved lowering stakes in five banks at the same time, and that timing would depend on market conditions. Separately, the report notes Central Bank of India has 9.05 billion shares issued and outstanding, and the government would have to sell 1.29 billion shares for the bank to meet the public shareholding norm. Across the three banks mentioned, the government would need to sell a total of 4.63 billion shares to enable compliance with the 25% public shareholding requirement, according to the same report.

Broader divestment pipeline: five PSBs under discussion

Multiple reports cited in the provided text point to a wider stake dilution programme in public sector banks. A CNBC Awaaz report said the Centre plans to offload up to 20% stake in each of five PSBs: UCO Bank, Bank of Maharashtra, Central Bank of India, Punjab & Sind Bank, and Indian Overseas Bank, and that the process could be completed within the next six months using QIP and OFS routes. Another report indicated the government may start OFS in these five PSBs in the next financial year (FY27), citing a packed divestment calendar in the current year and preparatory work by DIPAM to empanel merchant bankers and transaction advisors.

Key facts at a glance

Market impact: what investors will watch

For Central Bank of India, the immediate market variable is the size of incremental supply entering the market through the OFS. Investors will track non-retail bidding on May 22 for demand signals, and then retail participation on May 25. The gap between the floor price (₹31) and the prevailing market price can influence participation and the final clearing levels. The reported potential proceeds of around ₹2,455 crore, if the green shoe option is exercised, also frames the transaction’s scale.

Why this OFS is part of a longer process

The stake sale is also linked to the compliance path for minimum public shareholding in public sector banks. With the government reported at 89.27% in Central Bank of India, further dilution beyond this OFS may be needed over time to move toward the 25% public float threshold. Reports cited in the provided text also suggest the government is evaluating a mix of OFS and QIP routes across multiple PSBs, with execution dependent on market conditions and administrative timelines.

Conclusion

The government’s OFS in Central Bank of India opens on May 22, 2026 for non-retail investors, with retail and eligible employees bidding on May 25, 2026, at a floor price of ₹31 per share. The offer includes a 4% base stake sale and a 4% green shoe option, with the government currently holding 89.27% in the bank. Investors are likely to focus on institutional demand on the first day of bidding and on how the transaction fits into the broader push to raise public shareholding in public sector banks.