On May 31, Government proposed to offload a 3% stake in Coal India Limited under an offer-for-sale (OFS) at a discount of 6.7% to the stock’s last closing price. The OFS size is around Rs 4,000 crore.

The floor price for the OFS is planned at Rs 225 per share. This is close to a 7% discount from Coal India’s present market price. On May 31, the stock ended 1.20% lower at Rs 241.20 per share on BSE.

At 9:25 am, the coal major’s stock was trading at Rs 230.25, down 4.5% on the BSE, being the worst performer on Nifty50.

The Offer for Sale (OFS) starts for retail and non-retail investors on June 1 and 2.

The proposal is to relieve 9.24 crore shares of 1.5% in the coal producer. Besides, there will be a green shoe for selling an equal stake in oversubscription.

An Offer-for-Sale is easier as promoters in public firms can sell their shares and clearly lessen their holdings through the bidding platform for the exchanges.

According to the Bloomberg report in November 2022, the Indian Government was scheduled to sell 5-10% of Coal India, Hindustan Zinc, and Rashtriya Chemicals and Fertilizers (RCF), pushing a stock market boom with revenue in the final quarter of 2023.

At present value, lower-end sales could fetch the Centre around Rs 16,500 crore or $2 billion, as per Bloomberg’s calculations report.

The disinvestment target for 2023-24 may be set at Rs 65,000 crore, Financial Express (FE) reported.