The share price of Coal India remained under pressure in early trade today after the government moved ahead with an Offer for Sale (OFS) in the Maharatna public sector company.

The stock slipped nearly 4% in intraday trade as investors reacted to the announcement of a stake sale by the government at a discounted floor price.

The government has decided to sell up to a 2% stake in Coal India through the OFS route. The issue includes a base offer of 1% equity stake along with an additional 1% green shoe option, which can be exercised in case of strong investor demand.

The floor price for the OFS has been fixed at Rs 412 per share. This is nearly 10% lower than Coal India’s previous closing price, which stood above Rs 458 on Tuesday. 

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Let’s take a look at the key factors investors need to watch – 

Coal India shares after the OFS announcement

Stocks generally see short-term pressure whenever a large OFS is announced, especially when the floor price is set at a steep discount to the prevailing market price.

The key reason is that the market suddenly sees a large supply of shares becoming available. 

In Coal India’s case, the floor price of Rs 412 has created a significant gap compared to the recent market price.

At the same time, some market participants also prefer waiting for the OFS process to conclude before taking fresh exposure to the stock.

When can investors apply for the OFS?

The OFS opened for non-retail investors on May 27, while retail investors will be allowed to participate on May 29.

The government has been using the OFS route regularly to dilute stakes in public sector companies as part of its broader disinvestment and asset monetisation programme.

The Union Budget for FY27 has set a disinvestment and asset monetisation target of Rs 80,000 crore, significantly higher than the revised estimate for FY26.

What the government said about Coal India

Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said, “Government of India announces OFS in Coal India Limited with a base offer of 1% of its equity and an additional 1% Green Shoe Option in case of oversubscription.”

He also stated that Coal India continues to remain a long-term investment opportunity because of its operational performance, financial position and dividend payouts.

Coal India says coal availability remains comfortable

The company stated that it has built a coal buffer stock of nearly 168 million tonnes to meet rising electricity demand. It also said domestic coal-based power plants currently have adequate coal supplies despite the sharp rise in power consumption.

“Even as daily coal consumption by the country’s thermal power plants increased sharply, Coal India Limited (CIL) allays the coal shortage apprehensions. There is a 168 Million Tonne (MT)

coal buffer to meet the summer demand,” added the company in the exchange filling.