State-run Coal India shares are down sharply in early trading on Wednesday after the Government of India gave a nod to selling up to 2% of the company's shares through a special offer for sale (OFS), fueling a sell-off in the stock.
Key Highlights
- Coal India stock declined sharply after government announced Rs 5,076 crore discounted stake sale offer.
- Centre plans to divest up to 2 percent stake through offer for sale.
The Centre has fixed Rs 412 as the floor price for each share of Coal India, which is almost 10% lower than the share price of Coal India at its last closing price on the BSE of Rs 458.25.
The shares of Coal India tumbled as high as 6.6% on the day, losing almost Rs 13,000 crore of market capitalisation since the announcement.
The stock closed slightly up 0.05% at Rs 2.82 lakh crore at the close of Tuesday's trading session. Coal India had touched its 52-week high of Rs 490.90 on April 30, 2026, while its 52-week low stood at Rs 368.55 on August 28, 2025.
Government to Raise Over Rs 5,000 Crore via Stake Sale
The disinvestment exercise is a part of Centre's fiscal management and monetisation of public assets.
This base offer, which is the first, will see the government sell 6.16 crore equity shares-1% of the paid-up equity capital of Coal India. It also has a “Greenshoe” option of selling an additional 6.16 crore shares, if there is strong demand from investors, to raise the total issue size to size to 12.32 crore shares or 2% stake.
The transaction could fetch the government around Rs 5,076 crore if fully subscribed.
In a regulatory filing, Coal India said: "The President of India, acting through the Ministry of Coal, proposes to sell up to 61,627,283 equity shares representing 1 percent of the total paid-up equity share capital, with an option to additionally sell an equal number in case of oversubscription."
The OFS opened for non-retail investors on May 27, while retail investors and eligible employees can bid on May 29. The market remains closed on May 28 for Bakrid (Eid-ul-Adha).
Non-retail investors can carry forward unallotted bids to the retail window and revise applications under SEBI’s OFS framework.
Government Remains Majority Shareholder
The Government of India currently has a 63.13% holding in Coal India and the remaining 36.87% public stake is held by institutional investors, mutual funds and retail shareholders.
Coal India will be the second such OFS in this fiscal year following the sale of the stake in Central Bank of India by the Centre last year, raising Rs 2,266 crore.
The Union Budget for FY27 has been estimating disinvestment and asset monetisation proceeds at Rs 80,000 crore, which is much more than the revised estimate of Rs 33,837 crore in the FY26 Budget.
Also Read: Coal India's CMPDI Sets Rs 163- 172 Price Band for Rs 1,838-Crore IPO
Coal India Assures Adequate Summer Supply Buffer
On its part, Coal India filed a request to allay apprehensions about coal shortage during the peak summer electricity demand. The PSU has created a good buffer stock of 168 million tonnes (MT) to guarantee hassle-free supply in thermal power plants.
The coal stock position in domestic thermal power plants as of 23 May was 47.6 MT while as per pithead it is 113.5 MT as of 24 May, which is almost 10 per cent more than the corresponding period of last year.
Current reserves are good enough for about 19 days' worth of coal demand and the company has been actively engaging with power plants to build stockpiles ahead of the demand, particularly at critical logistics sites, it said.
The lower price of the OFS may encourage significant institutional investment, and despite the volatility in the stock price, Coal India's history of dividend payments and its operational stability are still expected to keep it appealing to long-term investors.
