The government is selling over 12.32 crore shares, representing up to 2% stake in Coal India at a floor price of ₹412 per share, according to reports from ETEnergyworld. This pricing represents a 10% discount from Tuesday's closing price of ₹458.25 on BSE. The offer for sale (OFS) opened on Wednesday for non-retail investors and garnered a solid response with over 8 times bids worth about ₹19,000 crore. The issue includes a green-shoe option of 1%, which the government has decided to exercise in full, as confirmed by Department of Investment and Public Asset Management (DIPAM) secretary Arunish Chawla. The OFS will open for retail investors, employees, and carry-forward bids on May 29, 2026, through both BSE and NSE, with retail investors having 10% of the offer reserved for them. DIPAM Secretary Arunish Chawla noted that the issue has received "enthusiastic response" from investors, and allocation will be done on a price priority basis.
Coal India shares closed at ₹458.25 on Wednesday, up 0.25% over the previous close, according to ETEnergyworld. The stock touched an intraday high of ₹462.90, with volume standing at over 1.70 crore shares by mid-session. However, after the OFS launch, Coal India shares tumbled nearly 4% as the market reacted to the pricing discount. The intraday strength contrasts with earlier weakness when shares declined 2.61% to ₹446.20 as of 13:23 on May 27, 2026, having opened at ₹429 against a previous close of ₹458.15, as reported by PL Capital Research. The intraday weakness is consistent with typical market behaviour around discounted PSU stake sales, where the floor price exerts downward pressure on the open market price as arbitrage activity increases. The company maintains a market capitalization of approximately ₹2,33,598 crore and offers a dividend yield of 7.2% with a healthy dividend payout ratio of 47.1%. The government has appointed Axis Capital, ICICI Securities, JM Financial, Kotak Securities, and SBICAP Securities as brokers for the issue, with settlement for non-retail investors happening on T+1 day and retail settlements on T+2 day as per SEBI OFS guidelines.
According to PL Capital Research, Coal India delivered strong Q4FY26 performance with EBITDA (excluding overburden removal) of ₹123 billion, up 8% year-on-year, and PAT rising 12% year-on-year to ₹109 billion. The company ended FY26 with cash reserves of ₹520 billion, equivalent to approximately 18% of market capitalization. Coal India maintains strong financial metrics with ROCE at 35.3% and ROE at 28.5%, while maintaining a low debt-to-equity ratio of 0.12, reflecting efficient operations and a healthy balance sheet. The stock trades at an attractive P/E ratio of 8.81, significantly below the industry average P/E of 16.9, indicating compelling valuation levels. PL Capital Research projects Coal India will distribute a dividend of ₹29.6 per share in FY27, translating to the implied dividend yield of approximately 7.2% at the OFS floor price of ₹412. The company has regularly rewarded investors with regular dividends and strong cash flow, making Coal India a popular choice among long-term investors.
According to ETEnergyworld, institutional investors subscribed to more than 45.15 crore shares or over 8 times the shares reserved for them at an indicative price of ₹436.69 per share, much higher than the set floor price of ₹412. At this indicative price, bids of over 45.15 crore shares amount to around ₹19,000 crore. This strong institutional demand demonstrates confidence in Coal India's fundamentals and growth prospects. Coal India is the second OFS of a public sector company in the current fiscal year, following last week's government sale of 8.08% stake in Central Bank of India via OFS and raised ₹2,266 crore. The FY27 Budget has estimated a mop-up of ₹80,000 crore through disinvestment and asset monetisation, more than double the ₹33,837 crore given in the Revised Estimates for FY26. The divestment does not alter the company's operations, cash generation, or dividend track record, but if the full green-shoe option is exercised, the government's equity stake would reduce from 63.13% to approximately 61.13% and increase public float, which may improve trading liquidity over time.
