Govt to sell up to 3% stake in Coal India offer-for-sale; shares tank over 4%

Coal India shares fell more than 4% in early trade on Thursday. This, after the government proposed to sell up to 3% stake in the company through an offer for sale (OFS) on the 1st and 2nd of June.

The centre, which holds 66.13% stake in Coal India, is likely to raise around ₹4,200 crore from the OFS.

The OFS includes a green shoe option, to further sell an additional 1.5%, which may be excercised on the 2nd of June in case of an over-subscription.

Non-retail investors can subscribe to the OFS starting on Thursday, while retail investors can do so starting on Friday. 10% of the OFS is reserved for retail investors.

The offer's floor price has been set at ₹225, which is at around a 7% discount to Wednesday's closing price of ₹241.20.

The Coal India OFS is the first large disinvestment from the centre for this financial year. The government's divestment taget for FY24 is ₹51,000 crore.

On Tuesday, Coal India announced a 8% hike in non-coking coal prices, making high grade coal costly. This will give the company a projected incremental revenue of over ₹2700 crore in FY24.