Coal India OFS: Govt sets ₹412 floor, May 27-29

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), aiming to raise around ₹5,000 crore for the exchequer. The floor price for the OFS has been fixed at ₹412 per equity share. The sale is structured as a 1% base offer with a further 1% greenshoe option that can be used in case of oversubscription. Coal India disclosed the plan in an exchange filing, and the announcement was also shared by Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla in a post on X. The OFS is scheduled across two trading sessions, with separate dates for non-retail and retail investors. The move is part of the government’s stake-sale route through market mechanisms.

Offer size: base issue and greenshoe option

Under the base offer, the government proposes to sell 6.16 crore equity shares, which represents 1% of Coal India’s total paid-up equity capital. If investor demand exceeds the base offer, the government has the option to sell an additional 6.16 crore shares under the greenshoe mechanism. If fully exercised, the total quantity on offer would rise to 12.32 crore shares, representing a 2% stake. At the floor price, the full sale is expected to raise around ₹5,000 crore. One version of the reported calculations pegs the base offer value at about ₹2,539 crore and the full exercise at about ₹5,078 crore. The stated objective across reports remains aligned with a roughly ₹5,000 crore divestment at the floor price.

Floor price and the implied discount

The floor price has been set at ₹412 per share, which is about a 10% discount to Coal India’s closing price cited in the reports. Coal India’s share price closed at ₹455.90 on the NSE on May 26, as referenced in the exchange-filing based coverage. Another data point in the same set of reports said Coal India closed at ₹458.25 on the BSE on Tuesday, up 0.25% from the previous close. Using the NSE close of ₹455.90, the floor price represents a near 10% discount. Such a discount is typical in OFS transactions, where price discovery happens through bids above the floor.

Key dates: who can bid and when

The OFS opens for non-retail investors on May 27. Retail investors can participate on May 29, which is also open to eligible employees and non-retail investors who carry forward unallotted bids. The schedule includes a market holiday in between. Indian markets will remain shut on Thursday, May 28, on account of Bakri-Eid, as noted in the coverage. The two-day structure is consistent with OFS processes where institutional bidding generally precedes retail participation. Investors planning to participate need to keep the holiday and the two separate windows in mind.

How the OFS will be executed

The share sale will be conducted through a separate window mechanism on both BSE and the National Stock Exchange. Coal India said the process will follow the Securities and Exchange Board of India (SEBI) guidelines governing OFS transactions. In practice, bids are placed at or above the floor price during the OFS window, and final allocations depend on price and demand. The greenshoe option allows the seller to increase the offered quantity if the book is oversubscribed. Coal India’s filing placed the transaction under the aegis of the Ministry of Coal, with the President of India acting through the ministry for the proposed sale. The final realized proceeds depend on the price discovered through the bids and the extent to which the greenshoe is used.

Employee reservation: shares and bid cap

Coal India also indicated that up to 25,000 equity shares may be offered to eligible employees under the OFS guidelines, subject to approval from the competent authority. Eligible employees can bid for shares worth up to ₹5 lakh (₹0.05 crore) under the employee reservation category. This component is small relative to the overall OFS size, but it is a defined part of the transaction structure. The employee portion is explicitly flagged as subject to necessary approvals. The participation window for eligible employees aligns with the retail day on May 29, as stated in the reports. Employees considering participation must stay within the value cap mentioned in the filing-based coverage.

Market context: where the stock closed before the OFS

Coal India shares were trading above the floor price at the time of the announcement. The reports cited a closing price of ₹455.90 on the NSE on May 26, and ₹458.25 on the BSE with a day-on-day rise of 0.25%. The floor price at ₹412 implies a discounted entry point relative to those closes. The discount matters for short-term price anchoring, because the market often references the floor in the lead-up to an OFS session. However, the allocation price for bidders depends on demand and bids during the OFS window. The company’s disclosure focused on mechanics and dates, rather than offering commentary on expected demand.

Earlier stake-sale chatter and the company’s response

Separately, another set of reports referenced a CNBC-TV18 story that the government was likely to divest a 3%-4% stake worth about ₹10,000 crore via the OFS route, citing sources. Those reports also said the government might offer shares at a discount to the prevailing market price. Coal India, in response to a query from CNBC-TV18, reportedly said it had not received any communication from the government regarding any potential OFS at that time, and a comment from DIPAM was awaited in that context. The subsequent official disclosures now specify a different and smaller transaction size of up to 2%, along with the fixed floor price and dates. Readers should distinguish between source-based market chatter and exchange filings or official government communication.

Snapshot of the announced OFS (key facts)

Why this OFS matters for investors and the market

For investors, the key variables are the floor price, the discount to the prior close, and the supply being brought to the market in a short window. A 2% potential sale is meaningful in absolute share count, with up to 12.32 crore shares potentially offered, so institutional demand and pricing during the non-retail session can shape expectations ahead of the retail day. For the government, the stated intent is to raise around ₹5,000 crore for the exchequer through a market-linked divestment. The transaction structure also reflects standard SEBI OFS processes, including the separate trading window and a greenshoe to manage demand. The presence of an employee allocation, though small, adds another defined bucket of participation under the guidelines.

Conclusion

The government’s Coal India OFS is set for May 27 and May 29, with a ₹412 floor price and a base 1% stake sale plus a 1% greenshoe option. Coal India’s exchange filing outlines the offer size, investor categories, and execution through BSE and NSE under SEBI rules. With markets closed on May 28 for Bakri-Eid, bidders will need to plan around the two-day format. The next concrete milestone is the opening of the non-retail OFS window on May 27, followed by the retail and employee participation day on May 29.