Shares of Coal India, a Maharatna Central Public Sector Enterprise (CPSE), fell the most in over six months after the Union Government said that it would sell a 3% stake in the company this week. 

The state-run company’s share price declined by 5% on Thursday’s early trades to reach an intraday low of ₹ 229.15 apiece on the National Stock Exchange (NSE). At 01:05 PM, its shares were trading at ₹ 229.80, down 4.75%. 

According to an exchange filing, the government will sell up to 9,24,40,924 shares, amounting to a 1.50% stake in the company, in line with its divestment targets. The floor price for the sale is fixed at ₹ 225.00 per share, which is at a discount of 6.74% as compared to Coal India’s closing share price of ₹ 241.25. The disinvestment is expected to fetch at least ₹ 4,158 crore for the government. 

Moreover, the government retains the right to sell an additional equal amount of stock in the event of oversubscription. This represents a total of 18,48,81,848 shares (3.00%) including the base offer.

The offer for sale will remain open on June 01 and June 02 for non-retail investors and on June 02, 2023, for retail investors. This is the first time that the government is selling a stake in the company in the current financial year. 

The offer for sale shall take place during trading hours on a separate window of the stock exchanges for both non-retail as well as retail investors according to an exchange filing. 

In another development, the company’s board on May 31, 2023, approved an 8% hike in prices for high-grade G2 to G10 coal. It expects this move to garner an incremental revenue of ₹ 2,703 crores during the rest of fiscal 2024. 

Coal India is a large-cap company with a market capitalization of ₹ 1,48,676 crores. It has a high return on equity of 56.11% and an ideal debt-to-equity ratio of 0.08. Its shares were trading at a price-to-earnings ratio of 5.28, which is almost at par with the industry P/E of 5.42. It has a very high dividend yield of 9.64%. 

Currently, the company’s promoters hold a 66.13% stake in it followed by domestic institutions with 12.10%, mutual funds with 8.71%, foreign institutions with 7.84% and retail investors with 5.22%. 

Written By Simran Bafna 


The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

To stay updated with the Latest Stock Market news, download our app here!

For editorial purposes, contact news@tradebrains.in

Start Your Stock Market Journey Today!

Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!