Coal India Share Price Fell 6.5% After Govt Launches OFS to Sell Up to 2% Stake

Shares of Coal India plunged as much as 6.49% on Wednesday, May 27, after the Government of India announced an Offer for Sale (OFS) to sell up to a 2% stake in the Maharatna PSU at a floor price of ₹412 per share.

The stock price of Coal India hit an intraday low of ₹428.40 on the NSE before recovering partially. It was later trading at ₹444.35, down around 3%. Coal India shares had closed at ₹458.25 on the BSE on Tuesday, up 0.05%, while the NSE closing price stood at ₹458.15, up 0.03%.

OFS Details and Fundraising Plan

The government plans to sell up to 12.32 crore equity shares through the OFS, including a base offer of 1% equity or 6.16 crore shares and an additional 1% green shoe option in case of oversubscription.

At the floor price of ₹412 per share, the issue is expected to raise around ₹5,000 crore for the exchequer.

DIPAM Secretary Arunish Chawla said the OFS for non-retail investors opened on May 27, while retail investors, eligible employees and unallotted non-retail bidders can participate on May 29. Indian markets will remain closed on May 28 due to Bakri-Eid.

The floor price is nearly 10% below the stock’s previous closing price, which triggered selling pressure in the counter.

Why Coal India Shares Declined

Stocks generally fall after an OFS announcement because the government offers shares at a discount to the prevailing market price. The large supply of shares entering the market also creates short-term pressure on the stock price.

Investors often remain cautious as the increased availability of shares may limit near-term upside potential.

Government’s Disinvestment Drive

Coal India is the second PSU OFS in FY27 after the government sold an 8.08% stake in Central Bank of India last week, raising ₹2,266 crore.

In the FY27 Budget, the Centre estimated ₹80,000 crore through disinvestment and asset monetisation, sharply higher than the revised FY26 estimate of ₹33,837 crore.

The government launches OFS transactions periodically to raise funds, improve public shareholding and increase liquidity in PSU stocks.

Coal India’s Operational Strength

Coal India also reassured markets about adequate coal availability during the peak summer season. The company said total coal availability in the system stood at 168 million tonnes.

Coal stocks at domestic thermal power plants were at 47.6 million tonnes as of May 23, while mine-head inventory stood at 113.5 million tonnes, up nearly 10% year-on-year.

The PSU added that around 3 million tonnes of coal was awaiting transit, while 4 million tonnes was currently in transit through railway rakes. According to the company, current stock levels are sufficient to meet 19 days of consumption.

Q4 Performance and Dividend

Coal India reported a 12% year-on-year rise in consolidated profit after tax to ₹10,908 crore in the March quarter. Revenue from operations rose 6% to ₹46,490 crore.

The board also announced a final dividend of ₹5.25 per share for FY26, subject to shareholder approval at the upcoming AGM.

DIPAM Secretary Arunish Chawla said Coal India continues to remain an attractive long-term investment opportunity backed by strong financial performance, stable operations and consistent dividend payouts.