The government's Coal India Limited offer for sale (OFS) has opened for retail investors today, May 29 following a solid response from non-retail investors.
Coal India OFS opened for non retail investors on Wednesday, May 27 and was over subscribed 8.14 times.
In a post on X, Department of Investment and Public Asset Management (DIPAM) Secretary said, "Offer for Sale in Coal India Limited received enthusiastic response from investors and was over subscribed 8.14 times on the first day. Allocation will be on price priority basis."
The government will exercise the oversubscription (greenshoe) option of 1% (6.2 crore shares) in Coal India OFS, making the total offer size to 2% (12.3 crore shares). The floor price for the Coal India OFS has been set at Rs 412 per share, which was around 10% discount to the prevailing market price at the time of announcement. Retail investors, who can subscribe to 10% of the total offer, can place bids starting May 29.
Should Retail Investors Opt For Coal India OFS?
Reflecting on whether retail investors should participate in Coal India OFS, G Chokkalingam, Founder & MD, Equinomics Research said, "it's medium to long term outlook is very impressive considering massive expansion of thermal power capacity in the country, CIL's aggressive expansion of solar power capacity, setting up of 3 coal gasification projects and proposed entry into critical minerals."
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Coal India Stake Sale
The latest stake sale is a part of the government's broader disinvestment programme and marks a new step in monetising assets in state-run enterprises.
In the last 16 years, the government has already raised around Rs 47,000 crore through stake sales in Coal India. After the latest OFS, total proceeds from the company are expected to rise to nearly Rs 52,000 crore, NDTV Profit earlier reported. The PSU launched its IPO in 2010 at Rs 245 per share. Since then, the government has undertaken multiple stake sales in the miner. In January 2015, the government sold a 10% stake and raised Rs 22,000 crore at Rs 358 per share.
In October and November 2018, it sold a 3% stake for Rs 5,300 crore at Rs 266 per share. Another 3% stake sale in May and June 2023 raised Rs 4,185 crore at Rs 225 per share. In June 2023, the government sold a 0.15% stake for Rs 209 crore at Rs 226 per share.
ALSO READ: Coal India OFS Confirmed: Govt To Sell Up To 6.2 Crore Shares; Floor Price Fixed
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