The Government of India starts an Offer for Sale (OFS) for its stake in Central Bank of India on Friday, seeking to offload up to 8% of the bank’s equity. Reports say the structure includes a base offer of 4% and an additional 4% through a green shoe option, which allows further share sale if demand is strong. The Economic Times provides further details, including an aim to raise about ₹2,244.8 crore. It states the OFS floor price is set at ₹31 per share, reflecting a discount to the previous closing price, and that the base portion involves sale of 36.21 crore shares worth ₹1,122.4 crore at the floor price. The green shoe option covers an additional 36.21 crore shares. The bidding schedule is described as opening for non-retail investors on May 22 and for retail investors on May 25. The Economic Times also notes reservations within the issue, including retail allocation and reservations for mutual funds and insurance companies, and refers to minimum public shareholding requirements that require further divestment. Separately, Business Standard reports that Central Bank of India shares fall about 6% as the OFS opens.
Government launches Offer for Sale of up to 8% stake in Central Bank of India
The Government of India starts an Offer for Sale (OFS) for its stake in Central Bank of India on Friday, seeking to offload up to 8% of the bank’s equity. Reports say the structure includes a base off...
- The government launches an OFS to sell up to an 8% stake in Central Bank of India.
- The OFS includes a base 4% sale plus an additional 4% green shoe option.
- A floor price of ₹31 per share is set for the offer.
- The OFS bidding is scheduled with non-retail investors bidding first and retail bidding later.
- The government aims to raise roughly ₹2,244.8 crore, and shares reportedly decline as the OFS opens.
Central Bank of India OFS price: The government is offloading an 8 per cent stake in Central Bank of India through an OFS, starting Friday. The government aims to raise ₹2,456 crore.
3 months agoThe Government of India has launched an Offer for Sale (OFS) in Central Bank of India, aiming to raise up to Rs 2,244.8 crore through the stake sale.The OFS will open for non-retail investors on May 22, while retail investors can bid on May 25. The government, which is part of the bank’s promoter group, has set the floor price at Rs 31 per share, reflecting a discount of around 9.4% to the last closing price of Rs 33.9.Under the issue structure, the base offer comprises 36.21 crore shares worth Rs 1,122.4 crore at the floor price, translating into a 4% equity sale. The government also has a greenshoe option for an additional 36.21 crore shares (another 4%), taking the total offer size to 72.41 crore shares worth Rs 2,244.8 crore.In an Offer for Sale (OFS), a greenshoe option is a provision that allows the seller (or promoter) to offload additional shares in case of strong investor demand. It acts as a price stabilisation mechanism to prevent extreme volatility.Of the total offer, 10% has been reserved for retail investors, while mutual funds and insurance companies have a 25% reservation.At the end of the March quarter, the government held an 89.27% stake in Central Bank of India, according to stock exchange data, while public shareholders owned the remaining 10.73%. Retail investors, defined as those holding shares worth up to Rs 2 lakh, held a 3.42% stake in the lender.To comply with minimum public shareholding (MPS) norms, the government will need to divest another 14.27% stake in the bank.Additionally, up to 75 lakh equity shares may be offered to eligible employees of the bank under the employee reservation portion of the OFS, subject to the necessary approvals. In line with OFS guidelines, eligible employees can apply for shares worth up to Rs 5 lakh.Last month, Central Bank of India reported a 30% decline in fourth-quarter net profit to Rs 724.4 crore from Rs 1,033.6 crore a year ago. However, net interest income (NII) rose 17.8% year-on-year to Rs 4,002 crore.The bank’s asset quality remained broadly stable during the quarter. Gross non-performing assets (NPA) improved marginally to 2.67% from 2.7% in the previous quarter, while net NPA edged up sequentially to 0.49% from 0.45%.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
3 months agoThe government will begin an offer for sale in the Central Bank of India on Friday, with a base offer of 4 per cent stake and an additional 4 per cent green shoe option
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