Central Bank Of India Shares Fall Over 6% Near 52-Week Low After Govt Announces Up To 8% Stake Sale Via OFS

Shares of Central Bank of India tumbled close to their 52-week low levels on Friday after the Government of India announced plans to offload up to an 8% stake in the state-owned lender through an Offer for Sale.

The PSU bank stock opened lower at Rs. 32.30 on the National Stock Exchange (NSE) and slipped further 6% to an intraday low of Rs. 31.83 during the session.

At around 12 PM, Central Bank of India shares were trading at Rs. 31.79, down 6.28%, with massive trading volumes as more than 55 million shares changed hands on the NSE & BSE.

The OFS floor price is nearly 8.58% lower than Thursday's closing price of Rs. 33.92 on the NSE, which caused a sharp selling in the stock today.

Government Launches Central Bank Of India Offer For Sale

As per the Official announcements, the Centre has initiated the sale of a 4% stake in Central Bank of India through the OFS route at a floor price of Rs. 31 per share. The offer opened for institutional investors on May 22, while retail investors will be able to participate in the share sale on Monday, May 25.

Moreover, as per the statement by the Secretary, Department of Investment and Public Asset Management, "the government has also included a greenshoe option that could allow it to sell an additional 4% stake, bringing the total possible divestment to 8%."

Govt May Raise Rs. 2,456 Crore Through Stake Sale

According to market estimates, the government could raise nearly Rs. 2,456 crore if the entire 8% stake sale, including the greenshoe option, is fully subscribed.

Under SEBI regulations, all listed companies are required to maintain a minimum public shareholding of 25%. Currently, the Government of India holds an 89.27% stake in the Central Bank of India.

If the greenshoe option is exercised completely, the government's stake in the public sector lender could reduce to nearly 81.27%.