Government launches OFS to sell up to 8% Central Bank stake gradually.
Stake sale aims meeting SEBI’s 25% minimum public shareholding compliance requirement.
OFS could help government raise nearly ₹2,456 crore through institutional and retail participation.
Why Govt Is Selling Up to 8% Stake in Central Bank of India
Government’s OFS in Central Bank of India aims to meet SEBI’s public shareholding norms
Central Bank of India branch signage during the government’s stake sale announcement through OFS
Summary
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The government will offload up to 8% stake in Central Bank of India through an offer for sale (OFS) starting on May 22, Disinvestment Secretary Arunish Chawla stated in a post on X on May 21.
The OFS will open for bids from non-retail investors on May 22, while retail investors can bid on May 25.
“Government offers to disinvest 4% equity in the Central Bank of India with an additional 4% as green shoe option,” Chawla mentioned in the post.
Currently, the government holds 89.27% stake in the bank, according to Business Standard. If the green shoe option is exercised, then the OFS sale can fetch the government some ₹2,455 crore at the closing price of the bank’s stock on May 21.
What's Central Bank of India OFS
According to Bajaj Finserv, the Central Bank of India OFS (Offer for Sale) is a mechanism through which the government is offloading up to an 8% equity stake in the bank to institutional and retail investors.
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The government is selling a 4% base stake, along with an additional 4% available under a greenshoe option to meet strong demand
Why Is Govt Selling Stake
According to Business Standard, the government launched an Offer for Sale (OFS) to offload up to an 8% equity stake in the bank, including a 4% greenshoe option, as part of its broader divestment strategy.
The move is aimed at meeting the Securities and Exchange Board of India (SEBI) norm requiring all listed companies to maintain a minimum public shareholding of 25%.
Before the OFS, the government held nearly 89.27% of the bank’s shares, leaving the public float at just over 10%. The stake sale is also expected to help the government raise up to ₹2,456 crore while gradually reducing its dominant holding in public sector banks.
In addition, the divestment is intended to improve market liquidity by expanding the public shareholder base and increasing trading participation in the bank’s stock.
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What Is Offer for Sale (OFS)
According to Bajaj Finserv, an Offer for Sale (OFS) is a regulated mechanism on the stock exchange that allows major shareholders—typically promoters or institutional investors—to sell their existing stakes in a listed company directly to the public.
Introduced by the Securities and Exchange Board of India (SEBI) in 2012, it is designed to be a transparent, rapid and cost-effective alternative to traditional share-issuance methods.