Government Launches OFS to Sell Up to 8% Stake in Central Bank of India

Mumbai: The Centre on Friday opened the Offer for Sale (OFS) process to divest up to 8 per cent stake in Central Bank of India, with the issue initially available for non-retail investors.

Shares of the public sector lender were trading slightly higher in early trade, rising around 0.29 per cent after the announcement.

Retail investors and eligible employees will be able to place bids on May 25. The government has fixed the floor price for the OFS at Rs 31 per share, which is more than 8.5 per cent lower than the bank’s closing price on Thursday.

According to the government, an additional sale option may also be exercised depending on investor demand.

Arunish Chawla said the government plans to divest 4 per cent equity stake initially, along with a 4 per cent greenshoe option.

The government has proposed to sell over 36.2 crore equity shares, representing 4 per cent of the bank’s total paid-up equity capital. If the greenshoe option is fully exercised, the OFS size could reach nearly Rs 2,455 crore based on Thursday’s closing market price.

As per the offer structure, at least 25 per cent of the shares reserved for non-retail investors will be allocated to mutual funds and insurance companies, provided valid bids are received at or above the floor price.

The offer document also stated that a minimum of 10 per cent of the total issue size has been reserved for retail investors. Additionally, 75 lakh equity shares have been set aside for eligible employees.

Retail investors will have the option to bid at the cut-off price, while eligible employees can apply for shares worth up to Rs 5 lakh. Employees may also participate in the retail category within the prescribed limits.

The government clarified that employee eligibility will be determined through PAN details shared by the bank with stock exchanges before the OFS opening.

The OFS process will run over two trading sessions. Non-retail investors can bid on the first day, while retail investors and employees can participate on the second day. Bidding will remain open from 9:15 am to 3:30 pm on both days. Non-retail investors will also have the option to carry forward any unallotted bids to the next trading day.

With inputs from IANS