Coal India Offer For Sale: All You Need To Know
The central government plans to sell 3% stake in Coal India.
The government's two-day offer for sale to sell 3% in Coal India Ltd. opened on Thursday.
Non-retail investors will be able to bid for shares on Day 1. Retail investors and non-retail investors who choose to carry forward their bids can participate on June 2, the world's biggest miner of the fuel informed exchanges on Wednesday.
The offer will be carried through a separate designated window of the BSE Ltd. and the National Stock Exchange Ltd.
Offer Details
The central government will sell up to 3% stake in Coal India Ltd.
The OFS will take place on June 1 and June 2 for a base offer of 9.24 crore shares, or 1.5% stake, and an additional 9.24 crore shares, or 1.5% stake, in case of oversubscription.
The floor price has been fixed at Rs 225 a share, a discount of nearly 7% compared to Wednesday's closing price of Rs 241.2.
The sale will be brokered by Axis Capital, ICICI Securities, JM Financial, Kotak Securities, and SBI Capital.
How Much Can The Government Garner?
The government, by selling up to 18.5 crore shares in Coal India is expected to raise up to Rs 4,000 crore. Back in 2010, Coal India raised around Rs 15,200 crore through the sale of 10% shares through its initial public offering at Rs 245 per share.
Coal India OFS will be a part of the government’s plan to divest its stake in public sector undertakings. It will play a crucial role for the government in achieving its FY24 divestment target of Rs 51,000 crore.
How Much Stake Does The Government Hold?
The central government now owns a 66.13% of the public sector company, with the public holding 33.87% including Life Insurance Corp.'s 11%.
Who Can Bid?
Non-Retail Investors
Non-retail investors are allowed to bid on June 1, with the option to carry forward unallotted bids to June 2. A minimum of 25% of the shares on offer are reserved for mutual funds and insurance companies.
If within the base offer of 9.24 crore shares, the non-retail category is oversubscribed on June 1, an additional 1.5% will be offered. In the event of oversubscription on June 2 in the non-retail category, allocation will be made on a proportionate basis.
Retail Investors
Retail investors are allowed to bid only on June 2, with 10% of the offer reserved for them. If the category is undersubscribed, those shares will be allotted to non-retail investors who have chosen to carry forward their unallotted bids to June 2. If the retail category is oversubscribed, allocations will be made on a proportionate basis.
Employees
Shares equivalent to up to 5% of the offer size may be offered to employees. The employees will be eligible to apply for equity shares up to Rs 5,00,000.
Shares of Coal India fell as much as 4.8% on Thursday, the most since Nov. 15, 2022, compared to a 0.13% gain in the benchmark Nifty 50 as of 12:25 pm.