The government has decided to sell its 8% stake in Central Bank of India through ‘Offer for Sale’ (OFS). For this OFS, the government has fixed the ‘floor price’ (minimum price) of ₹31 per share. This price is more than 8.5% lower than the bank’s closing price of ₹33.94 on Thursday. Following this decision, today – Friday, May 22 – the Central Bank’s shares fell by more than 5% on the market. Currently this share is trading at a price of around ₹ 32. In the last one month, it has fallen by more than 13%.
**OFS will open on different days for non-retail and retail investors**
According to a 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 May 25, 2026. On both days, the bidding facility will be open during trading hours – 9:15 am to 3:30 pm.
**4% stake in ‘base offer’; Also option to sell additional 4% depending on demand**
Under the ‘base offer’, the government will sell 4% stake – i.e., 362,056,051 equity shares.
If demand from investors remains strong, the government will also reserve the option to sell the same number of additional shares.
**Government’s 89.27% stake in Central Bank**
Currently, the government holds 89.27% stake in the Central Bank of India. This sale of shares is a part of the government’s broader disinvestment strategy and in compliance with ‘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, this allotment will be subject to the condition that their bids (bids) are received at a price equal to or above the prescribed ‘floor price’. Non-retail investors who do not receive shares in exchange for their bids can carry forward their bids to the next day (T+1 day). **10% quota for retail investors**
At least 10% of the shares offered in this ‘Offer for Sale’ (OFS) have been reserved for retail investors. Under this arrangement, retail investors are eligible to bid at the ‘cut-off price’. Additionally, 7,500,000 shares have been set aside for eligible employees of the bank. Eligible employees can apply for shares worth up to ₹5 lakh. Also, subject to prescribed rules and limits, they can also bid separately under the Retail category. The eligibility of the employee will be determined on the basis of PAN card details shared by the bank with the stock exchange.
**Trading will continue in the normal market segment**
The government has clarified that even during the process of this stake sale, trading of the bank’s shares will continue in the general market segment on the stock exchange. However, under certain circumstances – such as due to insufficient demand or other market-related factors – this offer may be withdrawn or cancelled. ‘Goldman Sachs (India) Securities Private Limited’ has been appointed as the broker for the seller (Government) for this entire transaction. This entire OFS is being conducted in accordance with SEBI regulations and stock exchange guidelines.
**What are ‘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 mechanism, it is called an ‘Offer for Sale’ (OFS). In contrast, ‘Green Shoe Option’ is a provision under which, if the demand for shares in the market exceeds the initial offer, the promoters reserve the right to sell additional shares (in this case, an additional 4%) of the originally earmarked stake.
