Coal India OFS today, govt seeks to offload 3% stake for Rs 4200 cr, share price tanks 5%; check 10 key details

Coal India share price tanked 4.8% to Rs 229.55 today ahead of the central government’s bid to divest up to 3% equity stake in the company through offer for sale of shares (OFS). The Centre is likely to raise about Rs 4,200 crore from the sale of the full 3% stake at the base price of Rs 225 per share, which is at a 7% discount to yesterday’s closing price of Rs 241.2.

Here are the top 10 things to know about the Coal India OFS today:

1. The government will offload a 3% equity stake in Coal India, including a green shoe option to further sell an additional 1.5% over the base offer. The size of the OFS is expected to be about Rs 4,200 crore. 

2. 9,24,40,924 equity shares, with a face value of Rs 10 per share, representing 1.5% of the equity are being divested on 1 June, while the green shoe option of 1.5% might be exercised on 2 June in case of oversubscription.

3. The government currently holds a 66.13% stake in the coal mining PSU.

4. The OFS opens for non-retail investors on Thursday, while retail investors can bid for their portion on Friday. Around 10% of the Coal India OFS is reserved for retail investors.

5. A retail investor can place bids only where the total value does not exceed Rs 2 lakh, aggregated across the exchanges.

6. 5% of the offer size may be offered to eligible and willing employees of Coal India, subsequent to the completion of the Offer. The employees will be eligible to apply for equity shares up to Rs 5,00,000. 

7. A minimum of 25% of the OFS will be reserved for mutual funds. If there is under subscription in the mutual fund portion, the remaining shares will be offered to other non-retail investors. 

8. The Coal India OFS is the first large divestment from the Government of India, who set a disinvestment of Rs 51,000 crore for the fiscal year 2024 which is lower than the previous financial year. 

9. Coal India increased the price of high grade coal on Tuesday, from grade G2 to G10, by 8%. Due to this revision, CIL is projected to earn an incremental revenue of Rs 2,703 crore for the financial year 2023-24.
10. Axis Capital, ICICI Securities, JM Financial Institutional Securities, Kotak Securities, SBICAP Securities are the brokers acting on behalf of the Centre.