Coal India Limited shares came under selling pressure in early trade on Wednesday, May 27, falling nearly 5% after the government launched its Offer for Sale (OFS) in the state-run coal producer at a discounted floor price.
Coal India shares were trading at ₹436.25, down ₹21.90 or 4.78%, after opening at ₹429. The stock touched an intraday low of ₹428.40 and a high of ₹436.50 during the session.
The decline follows the government’s announcement of an OFS with a floor price of ₹412 per share, which represented a discount of around 10.1% to Coal India’s previous closing price of ₹458.15 on the NSE.
Under the offer structure, the President of India acting through the Ministry of Coal will sell up to 6,16,27,283 equity shares under the base issue, equivalent to 1% of the company’s paid-up equity share capital. At the floor price, the base issue size works out to around ₹2,539 crore.
The government has also retained an oversubscription option to sell an additional 6,16,27,283 shares. If exercised in full, the total offer size would rise to 12,32,54,566 shares or approximately ₹5,078 crore, representing up to 2% of Coal India’s outstanding equity capital.
The OFS route is commonly used by the government as part of its disinvestment programme and the discounted pricing typically puts near-term pressure on stock prices due to additional supply entering the market.
Coal India remains India’s largest coal producer and a critical contributor to the country’s power generation ecosystem.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice.