Mumbai18 minutes ago
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The government decided to sell its 8% stake in Central Bank of India through Offer for Sale (OFS). The government has fixed the floor price for this OFS at ₹31 per share, which is at a discount of more than 8.5% from the bank’s Thursday closing price of ₹33.94.
After this decision, today i.e. Friday, May 22, there is a decline of more than 5% in the shares of Central Bank in the market. It is trading around Rs 32. It has fallen by more than 13% in a month.
OFS will open on different days for non-retail and retail investors
According to the notice issued by the Department of Investment and Public Asset Management (DIPAM), this OFS will open for non-retail investors on May 22, 2026.
At the same time, retail investors and bank employees will be able to place their bids for this issue on 25 May 2026. Bids can be placed from 9:15 am to 3:30 pm during trading on both days.
- 4% stake in base offer, option to sell additional 4% if demand is there
- Under the base offer, the government will sell 4% i.e. 36,20,56,051 equity shares.
- If the demand from investors remains good then the government will sell the same number of more shares.
Government holds 89.27% stake in Central Bank
At present the government’s stake in the Central Bank of India is 89.27%. This stake sale of the government is part of the government’s strategy to comply with disinvestment and public shareholding rules.
According to the offer document, at least 25% of the shares reserved for non-retail investors will be allotted to mutual funds and insurance companies.
However, for this it is necessary that their bids are received at or above the floor price. Non-retail investors can also carry forward their unallotted bids to the next day (T+1 day).
10% quota reserve for retail investors
At least 10% of the shares in this offer for sale have been reserved for retail investors. Retail investors will also be eligible to bid at the cut-off price under this mechanism. Additionally, 75,00,000 shares have been set aside for eligible employees of the bank.
Eligible employees can apply for shares worth up to ₹5 lakh. Along with this, they can also bid separately in the retail category under the prescribed rules and limits. The eligibility of the employees will be decided on the basis of PAN card details shared by the bank with the stock exchanges.
Trading will continue in normal market segment
The government has made it clear that even during this stake sale process, the bank’s shares will continue to trade in the stock market like the normal market segment. However, in certain special circumstances such as insufficient demand or other market related reasons, this offer may be withdrawn or cancelled.
Goldman Sachs (India) Securities Private Limited has been appointed as the broker of the seller (Government) for this entire transaction. This entire OFS is being conducted under SEBI rules and stock exchange guidelines.
What is Offer for Sale (OFS) and Green Shoe Option?
When the promoters of a listed company or the government sell their stake directly to investors through the market, it is called OFS.
Green Shoe Option is an option under which, if the demand is high in the market, the promoter reserves the right to sell more shares than the fixed stake (in this case additional 4%).
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