Government on May 31 has proposed to offload 3 percent stake in Coal India Limited via an offer-for-sale (OFS) at discount of 6.7 percent to last closing price of the stock. The size of OFS is around Rs 4,000 crore.
The floor price for the OFS is set at Rs 225 per share. This is at a discount of nearly 7 percent from Coal India's current market price. The scrip ended 1.20 percent lower at Rs 241.20 apiece on BSE today (May 31).
At 9:25 am, the coal major's stock was trading at Rs 230.25, down 4.5 percent on the BSE. The scrip was the worst performer on Nifty50.
The Offer for Sale (OFS) will be open for retail and non-retail investors on June 1 and 2.
The proposal is to offload 9.24 crore shares amounting to a stake of 1.5 per cent in the coal producer. Besides, there will be a green shoe option for selling an equal amount of stake in case of over subscription, according to a regulatory filing.
An Offer-for-Sale is a simpler method wherein promoters in public companies can sell their shares and reduce their holdings in a transparent manner through the bidding platform for the exchanges.
In an earlier report by Bloomberg in November last year, the Indian government was planning to sell 5-10 percent in Coal India, Hindustan Zinc and Rashtriya Chemicals and Fertilizers (RCF) to push a stock market boom and boost revenue in the final quarter of the financial year.
At present value, the sale at lower end of the range could fetch the Centre around Rs 16,500 crore or $2 billion, as per calculations reported by Bloomberg.
The disinvestment target for the year 2023-24 may be set at around Rs 65,000 crore, Financial Express (FE) had reported.
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