Shares of Coal India fell almost 5 percent on Friday after it announced in an exchange filing that the Government of India is planning to sell up to a 3 percent stake in the public sector undertaking worth ₹4,000 crore.
The stock fell as much as 4.7 percent to its day's low of ₹229.65.
The stake sale will take place via an offer for sale (OFS) and the floor price for the same has been decided at ₹225 per share, as much as 6.5 percent down from its last closing price of ₹241.20 (as on May 31, 2023). The OFS will be open for retail and non-retail investors on June 1 and 2, further stated the filing.
As per the filing, the government has proposed to offload 9.24 crore shares amounting to a 1.5 percent stake in Coal India. Additionally, there will also be a green shoe option for selling the same amount of stake in case of over-subscription, it informed.
"The seller proposes to sell up to 9,24,40,924 equity shares of the face value of ₹10 each of the company (representing 1.50 percent of the total paid-up equity share capital of the company) (base offer size), on June 1st and 2nd for retail investors and non-retail investors with an option to additionally sell 9,24,40,924 (1.50 percent) equity shares of the Company and in the event the Oversubscription Option is exercised, the equity shares forming part of the Base Offer Size and the Oversubscription Option will represent 18,48,81,848 (3.00 percent) equity shares of the Company," the filing said.
The stock has advanced 25 percent in the last 1 year and 7 percent in 2023 YTD.
The stock is over 8 percent away from its 52-week high of ₹263.30, hit on November 11, 2022, meanwhile, has gained 38 percent from its 52-week low of ₹174.6, hit on June 20, 2022.
Along with the current divestment in Coal India, reports indicate that the government is also planning to sell stakes in Coal India, Hindustan Zinc and Rashtriya Chemicals and Fertilizers (RCF) this year.