Retail investors can now participate in Central Bank of India's Offer for Sale (OFS), which opened for subscription on Monday, May 25. According to reports from CNBC TV18, the retail portion includes a base issue size of 3.62 crore shares with an oversubscription option of another 3.62 crore shares. The cut-off price for retail bidding has been fixed at ₹31 per share. Retail investors must have authorized share capital of up to ₹2 lakh to participate in this offering.
The non-retail portion had opened for subscription on Friday and received full subscription. As reported by CNBC TV18, the non-retail portion was reserved for 76.86 crore shares compared to 36.2 crore shares reserved for them, taking the total subscription figure to 2.35 times the total shares on offer. Following this strong response, the government decided to exercise the entire greenshoe option to divest another 4% stake in the lender.
The government still holds 89.27% stake in Central Bank of India, making it one of the many PSU lenders where government shareholding is not compliant with Minimum Public Shareholding norms. According to CNBC TV18, among public shareholders, Life Insurance Corporation of India (LIC) has a 3.26% stake, while over 7 lakh retail investors have a 3.42% stake in the bank. The latest OFS forms part of the government's ongoing efforts to comply with minimum public shareholding requirements prescribed by the Securities and Exchange Board of India, where all listed companies are required to maintain a minimum public shareholding of 25%.
Shares of Central Bank of India fell nearly 6% on Friday, declining as much as 6.69% to an intraday low of ₹31.65 on the NSE after opening 4.78% lower. The stock emerged as the worst performer on the Nifty PSU Bank index during the session. The floor price of ₹31 per share represents a discount of around 8.6% to Thursday's closing price of ₹33.91. The discounted offer price and prospect of increased share supply weighed on investor sentiment despite the broader push towards improving public float and regulatory compliance.
According to CNBC TV18, in case bids are accepted, the number of shares will be credited into the demat account within T+1 days. If bids are rejected, the funds will be refunded. Retail investors can subscribe through their trading accounts by navigating to the 'Corporate Action' or 'OFS' section, checking floor price, bid quantity, and other aspects. Bids placed under the cut-off price will be rejected, and sufficient funds must be available for bid acceptance. If the entire 8% stake is sold, the government is expected to raise approximately ₹2,456 crore through the transaction. Assuming full subscription of the greenshoe option, the government's shareholding would decline to 81.27%.
