MUMBAI – Shares of Coal India Limited (CIL) faced significant selling pressure during Thursday’s trading session following reports that the Government of India is planning to divest a 3-4% stake in the state-run mining giant. The divestment, likely to be executed via an Offer for Sale (OFS), is expected to raise approximately ₹10,000 crore as part of the Centre’s broader disinvestment agenda.
The stock’s decline was triggered by a CNBC-TV18 report suggesting that the shares might be offered at a discount to the current market price to attract investors.
Key Details of the Proposed OFS
- Stake Dilution: The government is reportedly looking to offload 3-4% of its equity. As of March 31, 2026, the Centre held a 63.1% stake in the company.
- Valuation: Based on current market trends, the sale is projected to bolster the exchequer by roughly ₹10,000 crore.
- Discounted Pricing: To ensure successful subscription, the government typically offers OFS shares at a discount to the prevailing market price, which often leads to short-term price corrections in the secondary market.
Strong Financial Foundation Amidst Sell-off
Despite the caution surrounding the stake sale, Coal India’s fundamental performance remains robust, as evidenced by its recent Q4 FY26 results:
- Profit Growth: The company reported a 11.15% YoY increase in consolidated Profit After Tax (PAT) at ₹10,839 crore for the March quarter.
- Sequential Surge: Net profit jumped over 51% compared to the ₹7,157 crore recorded in the December quarter.
- Dividend Reward: The board has recommended a final dividend of ₹5.25 per share, rewarding its vast base of over 25 lakh retail shareholders.
Shareholding Landscape
The OFS will likely see significant interest from institutional players who already hold substantial stakes in the Maharatna PSU:
- LIC: 11.05%
- Mutual Funds: 9.5%
- Foreign Portfolio Investors (FPIs): 8.38%
- Retail Investors: 3.82% (representing approximately 25.3 lakh shareholders)