Coal India extends fall as share sale begins

The stock was down 4% to Rs 265, extending its previous day's 4% decline on the BSE after the company's OFS of its equity shares began at price of Rs 266 per share today.

Shares of Coal India were down by 4.4% at Rs 265 per share on Wednesday in early morning trade, extending their 4% decline in the previous day on the BSE after the company’s offer for sale (OFS) of its equity shares began today.

The shares will be sold at a floor price of Rs 266, and the sale will be conducted on Wednesday and Thursday, the company said in a filing. The floor price is at a discount of 4% to Tuesday's closing price of Rs 277 on the BSE.

The government has decided to sell up to 186 million shares representing 3% stake in Coal India through an offer for sale (OFS) with a greenshoe option to sell another 6%  (372 million shares) to financial institutions and retail investors.

In case the total greenshoe option is exercised the government may be able to raise a minimum of Rs 99 billion. For a total 9% stake, the centre may be able to raise a minimum of Rs 143 billion.

Non-retail investors will be allowed to take part in the OFS on October 31. On November 1, both retail and non-retail investors can take part in the share sale. Retail investors may be allocated shares at a 5% discount to the floor price.

The government of India owns 78.3% in the coal miner, according to shareholding pattern data.

At 09:25 am; Coal India was trading 4% lower at Rs 264 on the BSE, as compared to 0.12% rise in the S&P BSE Sensex. A combined 1.7 million equity shares changed hands on the counter on the BSE and NSE so far.