Coal India Shares Fall The Most In Over Six Months On Government's Stake Sale Plan

Shares of Coal India Ltd. fell the most in over six months on Thursday after the government said it would sell a 3% stake in the company this week.

The government will sell up to 18.48 crore shares, amounting to a 3% stake, in the company through an offer-for-sale on June 1 and 2. The floor price has been set at Rs 225 per share. The disinvestment will fetch at least Rs 4,158 crore for the government.

The government also retains the right to sell an additional equal amount of stock in the event of oversubscription.

The Coal India offer-for-sale opens for non-retail investors on June 1 and for retail investors on June 2. This is the first stake sale in a public sector undertaking by the government in the current financial year.

"The offer shall take place during trading hours on a separate window of the stock exchanges on June 1, commencing at 9.15 a.m. and shall close on the same date at 3.30 p.m.," according to an exchange filing.

On May 31, the board of Coal India approved an 8% hike in prices for high-grade G2 to G10 coal. It also said that it expects to achieve incremental revenue of Rs 2,703 crore during the rest of fiscal 2024. 

Shares of Coal India fell as much as 4.85%, the most since Nov. 15, 2022, and were trading 4.5% lower at 9.20 a.m. on Thursday, compared to a 0.10% decline in the benchmark Nifty 50.

The total traded volume so far in the day stood at 12.1 times its 30-day average.

Of the 23 analysts tracking the company, 14 maintain a 'buy' rating, three recommend a 'hold,' and six suggest a 'sell' on the stock, according to Bloomberg data. The average of 12-month price targets implies an upside of 13.3%.