Coal India OFS: Govt stake sale of up to 2% at ₹412

What the government announced

The Government of India will sell up to a 2% stake in Coal India Limited (CIL) through an offer for sale (OFS) over May 27 and May 29, Coal India said in a stock exchange filing. The proposed divestment has been announced under the aegis of the Ministry of Coal. The Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla also posted on X about the planned OFS, describing it as a base offer of 1% with an additional 1% green shoe option in case of oversubscription.

The sale is structured to allow a larger stake sale if demand is strong. In practical terms, investors will see a two-day window with different participation rules for non-retail and retail bidders. Coal India said the transaction will be carried out on the stock exchanges through a separate window mechanism in line with SEBI’s OFS guidelines.

Floor price and discount to market

The floor price for the OFS has been set at ₹412 per equity share. Coal India’s shares closed at ₹455.90 on the NSE on May 26, making the floor price nearly 10% lower than the NSE close mentioned in the filing context.

On the BSE, shares closed at ₹458.25 on Tuesday, up 0.25% from the previous close, according to the information provided. The floor price sets the minimum price at which bids can be placed in the OFS process, subject to the final allocation rules and price discovery within the permitted range.

Offer size: 1% base and 1% green shoe

As per Coal India’s exchange filing, the Ministry of Coal has proposed to sell 6.16 crore equity shares, representing 1% of Coal India’s total paid-up equity capital, as the base offer size. The government also retains an oversubscription option to sell an additional 6.16 crore shares.

If the additional option is exercised fully, the total potential offer size rises to 12.32 crore shares, equivalent to a 2% stake sale. DIPAM’s communication also described this structure as a base offer plus a green shoe option.

Key dates and who can bid when

The OFS will open for non-retail investors on May 27. Retail investors, eligible employees, and non-retail investors who choose to carry forward unallotted bids can participate on May 29.

Indian markets will remain shut on Thursday, May 28, on account of Bakri-Eid. This market holiday sits between the two OFS bidding days, which is relevant for investors planning funding and order placement.

Where the OFS will take place

Coal India said the OFS will be conducted through a separate window mechanism on the BSE and the National Stock Exchange. The company also referenced compliance with SEBI regulations that govern OFS transactions.

For investors, this means the sale will happen on exchange platforms rather than through a separate subscription process. The structure is intended to standardise allocation mechanics and disclosure requirements for government stake sales.

Employee reservation: shares and bidding limit

Coal India also disclosed an employee reservation component. Up to 25,000 equity shares may be offered to eligible employees of Coal India, subject to approval from the competent authority.

Eligible employees can bid for shares worth up to ₹5 lakh under the employee reservation category, according to the details provided. This category typically runs alongside the main OFS, with conditions based on OFS guidelines and applicable approvals.

Expected proceeds and what the numbers imply

The information provided indicates the sale is expected to raise around ₹5,000 crore for the exchequer, as reported. This estimate is linked to the proposed sale size of up to 12.32 crore shares and the floor price of ₹412 per share.

Separately, the text also includes references to earlier “sources say” commentary that spoke about a potential 3% to 4% stake sale worth around ₹10,000 crore and the possibility of a material discount. Those references were framed as market talk rather than the final terms disclosed in Coal India’s exchange filing, which outlines the up to 2% structure and the ₹412 floor price.

Market context: stock levels referenced in the announcement

The filing and related updates cite Coal India’s NSE closing price of ₹455.90 on May 26. Another data point provided is the BSE close of ₹458.25 on Tuesday, with the stock up 0.25% from the previous close.

These prices matter mainly because the OFS floor price is set below them, indicating a discounted entry point relative to the cited closing levels. Beyond that, the provided information does not include broader sector moves or index-level impacts.

Snapshot of the OFS terms

What investors will watch next

The key variables will be the level of subscription against the base 1% offer and whether the government chooses to exercise the additional 1% option based on oversubscription. Participants will also track the bidding behaviour across the two days, given the holiday gap on May 28.

Coal India’s exchange filing provides the formal framework and timelines, and any further updates are expected to come via stock exchange disclosures tied to the OFS process and allocations under SEBI’s OFS guidelines.