Coal India OFS Oversubscribed 8.14 Times in First Day of Book Building; Government to Exercise Green Shoe Option

Government's Offer for Sale in Coal India Limited Receives Strong Investor Response

The government's Offer for Sale (OFS) in state-run Coal India Limited received a strong investor response on the first day, with the issue getting oversubscribed 8.14 times. The Department of Investment and Public Asset Management (DIPAM) Secretary announced that allocation will be on price priority basis.

The government has decided to exercise the entire green shoe option, which allows the seller to increase the number of shares being sold if investor demand remains strong. Retail investors and employees will get to bid on Friday, May 29th, 2026. An Offer for Sale, or OFS, is a mechanism through which promoters of a listed company sell their shares through the stock exchange platform. In this case, the Government of India, acting through the Ministry of Coal, is selling part of its stake in Coal India.

An oversubscribed issue means investor demand for shares was much higher than the number of shares offered for sale. According to a stock exchange filing by Coal India, the government had initially proposed to sell 61,627,283 equity shares, representing 1% of the company's total paid-up equity share capital, as the base offer size. The filing further stated that the government had the option to additionally sell another 61,627,283 equity shares under the oversubscription option, also known as the green shoe option.

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With the exercise of the full green shoe option, the total offer size now stands at 123,254,566 equity shares, representing 2% of Coal India's total paid-up equity share capital, according to the filing. The filing added that 12,325,458 equity shares, representing 10% of the offer, would be available for retail investors on day 1, or May 29, subject to receipt of valid bids. The company also said that up to 25,000 equity shares would be offered to eligible employees in accordance with the terms and conditions of the OFS guidelines.

The company had the base cut-off price of Rs 450.10 in OFS, which means this is the minimum price at which investors can bid for shares under the Offer for Sale. And now, the green shoe cut-off price is at Rs 447.05, which refers to the additional shares that can be sold if there is excess demand in the OFS. It is usually slightly lower and helps the government raise more funds if investor demand remains strong.

Shares of Coal India closed at Rs 463.05 per share on Wednesday on the National Stock Exchange.

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