Strong Investor Demand in Coal India Share Sale

Institutional investors enthusiastically oversubscribed the Coal India OFS on its opening day, with bids more than double the base issue. The Indian government plans to sell up to 2% of its stake at a discount, potentially raising Rs 5,000 crore.

On Wednesday, institutional investors displayed strong interest in Coal India's offer for sale (OFS), oversubscribing their portion of the shares on the first day. Bids from non-retail investors amounted to over 11.52 crore shares, more than double the base offer reserved for them. This high demand was met at an indicative price of Rs 417.62 per share by 1410 hours.

The window for bidding remains open until 1530 hours. Due to this overwhelming interest, the government anticipates exercising its green-shoe option in the OFS. It aims to sell up to 2 per cent of its stake in Coal India, translating to over 12.32 crore shares, at a floor price set at Rs 412 each. This move is projected to generate approximately Rs 5,000 crore for the exchequer. Retail investors will have an opportunity to bid on May 29, following a market holiday on May 28.

Currently, shares of Coal India are trading at Rs 451.50, reflecting a 1.47 per cent decline from Tuesday's closing on the BSE. The scheduled OFS marks the second public sector undertaking share sale this fiscal year, following the recent divestment of an 8.08 per cent stake in Central Bank of India, which raised Rs 2,266 crore. The national budget forecasts Rs 80,000 crore through asset monetisation and disinvestment, a significant increase from the previous fiscal's revised estimates.