Coal India’s ongoing offer for sale (OFS) witnessed a healthy response from investors on Wednesday, with cumulative demand crossing the offered quantity during the first day of bidding. Data available on the BSE OFS platform showed that the issue had been subscribed 145.29% as of 1:50 PM, indicating solid participation despite pressure on the stock price after the discounted stake-sale announcement.
The OFS was launched by the Government of India through the Ministry of Coal, which is divesting a stake in the state-owned coal producer. The floor price for the issue has been fixed at ₹412 per share, representing a discount of nearly 10% to Coal India’s previous closing price of ₹458.15.
According to the exchange data, cumulative bids stood at 8,05,85,950 shares against the non-retail offer size of 5,54,64,554 shares. Demand was therefore significantly higher than the shares on offer, suggesting institutional investors have shown interest in the issue even amid broader market fluctuations.
The indicative price during the session stood at ₹417.75 per share, which was above the OFS floor price. The willingness of investors to bid above the floor price is often viewed as a sign of healthy demand, although final allocation and pricing dynamics remain dependent on the closing bids.
The government had initially announced a base offer size of around 6.16 crore shares, equivalent to nearly 1% of Coal India’s paid-up equity capital. In addition, an oversubscription option of another 6.16 crore shares has been kept, taking the total potential offer size to around 12.32 crore shares or nearly 2% equity dilution. At the floor price, the total transaction size including the green-shoe option could exceed ₹5,000 crore.
The OFS structure also includes a small employee reservation component. Up to 25,000 shares may be offered to eligible employees under the applicable OFS guidelines.
Coal India remains India’s largest coal producer and continues to play a critical role in the country's energy requirements. The company contributes a major share of domestic coal output and supplies fuel primarily to power generation companies, steel producers and industrial consumers.
Despite the healthy subscription trend in the OFS, Coal India shares traded in the red during Wednesday's session as the discounted offer price weighed on market sentiment. Such price pressure is generally seen during OFS transactions as market prices tend to move closer to the offer price.
Meanwhile, shares of the company were trading lower by 2.15% at ₹448.30 on the NSE at the time of publishing this article. The stock touched an intraday high of ₹452.85 and a low of ₹428.40 during the session.
Disclaimer: This article is for informational purposes only and should not be considered investment advice.