The Coal India share has grabbed market attention this week. It is because the Central Government announced a significant disinvestment move. This was to offload up to 2% of the government's equity stake in Coal India Limited (CIL) with an Offer for Sale (OFS). The move set a floor price of ₹ 412 per share.
With that the idea is to raise approximately ₹5,000 crore for the government exchequer.
(Source: TOI)
What is the Coal India OFS?
An Offer for Sale (OFS) is a stock exchange mechanism using which the existing shareholders sell their shareholding to the public. In this case it is the Government of India. It is quicker and is a preferred disinvestment tool for the government. This is more transparent than traditional Follow on Public Offers (FPOs).
The Centre has announced an OFS in Coal India Ltd. The base offer was of 1% of its equity, along with an additional 1% Green Shoe Option, in case of oversubscription. The total expected sale is 12.32 crore shares approximately at ₹ 412 per share.
DIPAM Secretary Arunish Chawla confirmed the move via post on X.
“Government of India announces OFS in Coal India Limited with a base offer for 1 per cent of its equity and an additional 1 percent Green Shoe Option in case of oversubscription. Floor price fixed at ₹ 412 per share.”
Coal India Share Price
Source: ET
Coal India Share Price Vs OFS Floor Price
One of the most critical aspects investors are watching is the 10% discount offered on the Coal India share price through this OFS.
Parameter | Details |
OFS Floor Price | ₹ 412 per share |
Coal India Share Price (BSE Close, May 27) | ₹ 458.25 |
Discount to Market Price | ~10% |
Total Shares on Offer | ~12.32 crore |
Expected Proceeds | ~₹ 5,000 crore |
OFS Open Date (Non-Retail) | May 27, 2026 |
OFS Open Date (Retail) | May 29, 2026 |
Share of Coal India closed at ₹458.25 on the BSE. Which is up to 0.25% from the previous close just before the OFS announcement. After the OFS launch, Coal India shares tumbled nearly 4% as the market reacted to the pricing discount.
Why is the Government Selling at Discount?
The floor price ₹ 412 per share indicates a 10% discount to the prevailing market price. Here are the actual reasons behind the strategic planning:
1. To Ensure Full Subscription:
A discounted floor price creates a built-in profit margin for buyers on Day-1 itself. This will make it highly likely that the OFS will be fully subscribed. If the OFS fail to attract enough to bid, the government does not raise the targeted ₹ 5,000 crore.
2. To Attract Institutional Investors (Non-Retail Window, May 27):
Large institutional players like mutual funds, insurance companies, and FIIs operate on this return margin. A visible discount gives them justification to allocate capital, especially when the company has underperformed broader markets in recent months.
3. To Drive Retail Participation (Retail Window):
SEBI guidelines mandate a retail investor window in an OFS. The discount incentivizes small investors, who are generally price sensitive.
4. To Meet Disinvestment Target:
The government has set an ambitious disinvestment target of ₹ 8,000 crore for FY 27. An undersubscribed OFS would send a negative signal in the market. And this might lead to giving a generous discount mandatory to ensure smooth sales.
5.Market Overhang Concerns:
A large government stake sale itself tends to depress the stock price for some time. The discount is designed to offset this psychological selling pressure and keep demand strong despite the overhang.
Coal India’s Disinvestment in Context
The Coal India OFS is part of India’s broader FY 27 disinvestment roadmap.
The government projected ₹ 80,000 crore from disinvestment and asset monetisation in the Union Budget for FY 27. It is more than double of the revised estimate of ₹ 33,837 crore for FY 26.
Other than Coal India, last week the government raised ₹ 2,266 crore after it sold an 8.08% stake in the Central Bank of India through an OFS. These disinvestments signal the government’s renewed push to meet ambitious disinvestment targets. (Source: TOI)
About Coal India Limited
Coal India Limited is a Maharatna PSU and the world’s largest coal producing company. With a market capitalisation of approximately ₹2.82 lakh crore, CIL is a heavyweight in the Indian Stock Market.
The company has regularly rewarded investors with regular dividends and strong cash flow, making the Coal India share a popular choice among long term investors.
The Coal India share trades at around ₹457-458 on both NSE and BSE, with a 52 week range of ₹369-₹491 and a P/E ratio of 9.08. (Source: NSE)
How to Apply in the Coal India OFS
Log in to your demat and trading account.
Navigate to the OFS section on the broker’s platform.
Place a bid or above the floor price of ₹412.
Final Word
Coal India is a significant disinvestment event, offering investors a rare chance to buy India’s one of the most profitable PSU at a 10% discounted price. If you are looking for investment, keep a close eye on the Coal India share price movement and OFS subscription data over the next few days will be crucial for making an informed investment decision.
FAQs
What is the floor price set for the Coal India OFS and how much discount does it offer?
The floor price for Coal India OFS is ₹412 per share. This is a 10% discount of market price ₹457-458 on BSE/ NSE.
How many shares is the government selling and how much does it aim to raise?
The government is selling 12.32 crore shares, a base offer of 1% equity with an additional 1% Green Shoe Option (if there is an oversubscription). The OFS will help raise ₹ 5000 crore.
Who can apply for Coal India OFS?
Both retail and institutional investors can apply for Coal India OFS. For non-retail investors the window is open till May 27, 2026. And for the retail investors, the window opens on May 29, 2026.
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