Government to Activate Greenshoe Option Following Rs 19,000 Crore Bids on First Day of Coal India OFS
Coal India has announced that, due to significant investor interest, the government will exercise the oversubscription option in its offer-for-sale (OFS) initiative. The government plans to release up to 12.32 crore shares, which constitutes 2% of Coal India’s total paid-up equity capital. On the first day of the issue, institutional investors showed robust engagement, submitting bids worth approximately Rs 19,000 crore, significantly exceeding expectations. The institutional segment saw subscriptions for over 45.15 crore shares, corresponding to over 8 times the quantity reserved for non-retail investors, with an indicative bidding price set at Rs 436.69 per share.
The structured OFS began for non-retail investors on May 27 and is set to open for retail investors on May 29, with Indian markets observing a holiday on May 28 due to Bakri-Eid. Approximately 10% of the total offering, or about 1.23 crore shares, is earmarked for retail investors on the second day of the OFS. Additionally, the company has reserved up to 25,000 shares specifically for eligible employees under a unique employee reservation category, permitting bids of up to Rs 5 lakh. The share sale follows a separate window mechanism on the BSE and NSE in compliance with SEBI guidelines, reflecting the government’s commitment to its broader disinvestment strategy.
Coal India’s recent financial performance has bolstered investor confidence, with a reported 12% year-on-year increase in consolidated profit after tax for the March quarter, reaching Rs 10,908 crore. Revenue from operations also rose by 6% to Rs 46,490 crore, driven by higher commodity prices and improved other income streams. This strong financial profile, coupled with the company’s reputation as a leading dividend-paying public sector enterprise, continues to draw interest from both institutional and retail investors looking for steady cash flows and exposure to India’s energy sector. Overall, the current offer underlines the ongoing demand for Coal India’s shares and reflects its strategic importance in the disinvestment agenda of the government.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)