Government to Raise ₹2,456 Crore via Central Bank of India (CBI) OFS with Greenshoe Option

The Government of India has launched an Offer for Sale, OFS, in Central Bank of India to raise nearly ₹2,456 crore through stake dilution in the public sector lender. The OFS opened for institutional investors on May 22, 2026, while retail investors can bid on May 25, 2026. The move is part of the government’s disinvestment strategy and also aims to improve public shareholding in the PSU bank. The Centre currently holds 89.27 percent stake in the Central Bank of India. After the full OFS, including the greenshoe option, the holding may decline to nearly 81.27 percent. 

Central Bank of India OFS Details Investors Should Track

The OFS includes a base offer of 4 percent equity stake and an additional 4 percent greenshoe option. The floor price has been fixed at ₹31 per share, which was nearly 8.6 percent lower than the previous market closing price of ₹33.91. 

Key OFS figures

Base offer size: 36.20 crore shares
Total possible offer size: 72.41 crore shares
Estimated fundraising target: ₹2,456 crore
Retail investor bidding date: May 25, 2026
Employee reservation: 75 lakh shares

Reports by Outlook Business and other financial platforms highlighted strong institutional demand during the first day of bidding.

Why Is the Government Selling Stake in Central Bank of India?

The biggest reason is SEBI’s minimum public shareholding rule. Listed companies in India must maintain at least 25 percent public shareholding.

• At present, government ownership in the Central Bank of India remains above that limit. The OFS helps the Centre move closer to compliance while also generating funds through divestment. 
• Another reason is to improve liquidity in the stock. Higher public participation usually increases trading volumes and institutional activity.

Investors Also Ask: Is Central Bank of India OFS Fully Subscribed?

Yes, demand remained strong during the institutional bidding window. According to DIPAM Secretary Arunish Chawla, the OFS was subscribed to 2.35 times on Day 1, leading the government to exercise the full greenshoe option. This indicates strong institutional confidence in the PSU banking space despite short-term market volatility.

Central Bank of India Share Price Reaction

• Shares of Central Bank of India fell nearly 6 percent after the OFS announcement because the floor price was lower than the prevailing market price. The stock touched an intraday low of ₹31.65 on NSE during the OFS launch session. 
• However, analysts believe such corrections are common during government stake sales due to temporary supply pressure. The bank’s market capitalization stood near ₹28,800 crore during the OFS period.

Investors Also Ask: Should Retail Investors Consider the OFS?

• Market experts say investors should look at both valuation and long-term PSU banking growth. The Central Bank of India has shown steady loan growth, improving asset quality, and stronger operational performance in recent quarters. 
• PSU bank stocks have also benefited from better credit demand and lower stress assets across the sector. Still, analysts caution that short-term volatility may continue because OFS transactions usually create temporary pressure on share prices.

Wrapping Up: ANALYST REVIEW

Analysts believe the Central Bank of India OFS is an important step in the government’s broader PSU banking reform and divestment strategy. The strong institutional response and oversubscription suggest that investor confidence in public sector banks remains healthy in FY27. The ₹31 floor price gives retail investors an entry point below recent trading levels, but market participants should also watch future earnings growth, credit expansion, and asset quality trends before making fresh investments. Experts say the bank’s improving fundamentals and rising public float could support liquidity in the long term. However, short-term price swings may remain due to OFS-related supply pressure and broader market movement in banking stocks.

Disclaimer

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