Institutional investors showed strong interest in Coal India's offer for sale (OFS) on Wednesday, submitting bids worth approximately Rs 19,000 crore on the first day. The non-retail segment subscribed to over 45.15 crore shares, exceeding the reserved shares by more than eight times at an indicative price of Rs 436.69 per share, surpassing the floor price.
The offer size included a base of 6.16 crore shares, representing a 1% stake, with an additional 1% available under the oversubscription option. The OFS commenced for non-retail investors on May 27, with retail investors, eligible employees, and non-retail investors with unallotted bids able to participate on May 29. Indian markets will be closed on May 28 due to Bakri-Eid.
The share sale is being conducted through a separate window mechanism on the BSE and NSE, adhering to Sebi guidelines. Of the total offer size, 10% or approximately 1.23 crore shares are reserved for retail investors on the second day, contingent on valid bids. Additionally, up to 25,000 shares are reserved for eligible employees of Coal India, who can bid for shares worth up to Rs 5 lakh.
The government remains the promoter of Coal India, and this stake sale is part of its broader disinvestment and market monetisation strategy. Coal India recently reported a steady performance for the March quarter, with a 12% year-on-year increase in consolidated profit after tax to Rs 10,908 crore and a 6% rise in revenue from operations to Rs 46,490 crore, driven by improved realisations and higher other income.
Coal India has consistently been one of the highest dividend-paying public sector companies, attracting both institutional and retail investors seeking stable cash flows and exposure to the energy sector.
Background
Coal India's OFS is a significant component of the Indian government's ongoing disinvestment efforts, aimed at reducing its stake in public sector enterprises to raise funds and enhance market efficiency. The company's strong financial performance and high dividend payouts make it an attractive option for investors.
The outcome of the OFS and the exercise of the greenshoe option will be closely watched, as it could influence the government's future disinvestment plans and market strategies.
