Coal India OFS opens May 27; government plans sale of up to 2% stake

The Government of India will divest up to a 2% stake in Coal India Limited (CIL) through an Offer for Sale (OFS) scheduled over May 27 and May 29, according to a stock exchange filing by the state-owned mining company on Tuesday. The government has fixed the floor price at ₹412 per equity share, nearly 10% lower than Coal India’s closing price of ₹455.90 on the NSE, offering investors an opportunity to buy shares at a discount.

Under the proposed OFS, the government plans to sell 6.16 crore equity shares, representing 1% of Coal India’s total paid-up equity capital, as the base issue size. It has also retained a greenshoe option to sell an additional 6.16 crore shares in case of oversubscription. If fully exercised, the total offer size will increase to 12.32 crore shares, equivalent to a 2% stake sale.

The share sale process will begin on May 27 for non-retail investors, while retail investors, eligible employees and non-retail investors carrying forward unallotted bids can participate on May 29.

The timing of the issue comes amid a shortened trading week, as Indian stock markets will remain closed on May 28 on account of Bakri-Eid. The OFS will be executed through a separate window mechanism on both the BSE and National Stock Exchange, in line with Securities and Exchange Board of India (SEBI) regulations governing OFS transactions.

Coal India also said that up to 25,000 equity shares may be offered to eligible employees, subject to necessary approvals. Eligible employees can place bids worth up to ₹5 lakh under the employee reservation category.

The Government of India currently remains Coal India’s promoter and continues its divestment strategy through stake sales in public sector enterprises. The latest OFS comes at a time when Coal India has reported stable financial and operational performance.

For the quarter ended March, Coal India posted a 12% year-on-year increase in consolidated profit after tax to ₹10,908 crore, while revenue from operations rose 6% to ₹46,490 crore. The performance was supported by improved realizations and growth in other income streams.

The company’s board also announced a final dividend of ₹5.25 per share for FY26, subject to shareholder approval at the upcoming Annual General Meeting (AGM).

The government said Coal India continues to remain an attractive long-term investment opportunity, backed by strong operational performance, stable earnings and a consistent dividend payout track record. Market participants will now closely track investor response to the OFS, especially given the discounted pricing and Coal India’s position as one of India’s largest dividend-paying public sector companies.

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