Govt Exercises Greenshoe Option, Doubling Coal India Stake Sale to Rs 5,000 Crore

The Government of India has decided to exercise the greenshoe, or oversubscription, option in the ongoing offer for sale (OFS) of Coal India Limited after receiving strong investor demand. According to an exchange filing on Wednesday, the government will sell an additional 1 percent stake in the company under the greenshoe option, increasing the total issue size from Rs 2,500 crore to Rs 5,000 crore. The move forms part of the Centre’s broader disinvestment program aimed at raising revenue through stake sales in public sector enterprises.

Coal India’s OFS received bids for 24.6 crore equity shares from non-retail investors against a base offer size of approximately 5.54 crore shares, translating into an oversubscription of more than four times. Under the greenshoe option, the government will sell an additional 6.16 crore shares, taking the total offer size to around 12.3 crore shares or nearly 2 percent of the company’s equity. In its filing, the government stated that it was exercising the oversubscription option for an additional 61.6 million equity shares beyond the original base offer.

The OFS for non-retail investors opened on May 27, while the retail portion is scheduled to open on May 29 and will account for 10 percent of the total issue size. The floor price for the share sale was fixed at Rs 412 per share, lower than Coal India’s previous closing price of Rs 444.85 on the BSE. The indicative price for the issue stood at Rs 417.48 per share. The filing also mentioned that up to 25,000 equity shares would be reserved for eligible employees of the company under the applicable OFS guidelines.

Also Read: Non-Retail Portion Of Coal India OFS Fully Subscribed Amid Strong Demand

The latest stake sale marks another major step in the government’s long-running disinvestment efforts involving Coal India. Since the company’s initial public offering and subsequent stake sales over the past 16 years, the government has raised substantial revenue through dilution of its holdings. With the current OFS included, total proceeds from stake sales in Coal India are expected to reach nearly Rs 52,000 crore, according to estimates cited in the filing.

Shares of Coal India ended 1.19 percent higher at Rs 463.60 on the National Stock Exchange of India on Wednesday, outperforming the benchmark NIFTY 50, which closed marginally lower. Analysts said the strong subscription response reflects continued investor confidence in the company’s financial performance, dividend track record, and strategic importance in India’s energy sector despite ongoing discussions around renewable energy transition and coal dependency.

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