The government’s offer for sale (OFS) in Central Bank of India was subscribed 2.35 times on the first day, prompting the government to exercise the entire green shoe option, according to livemint.com. This move will reduce the government’s stake in the bank from 89.27% to 81.27%.
The OFS attracted strong demand from institutional investors, reflecting confidence in the bank’s prospects. Arunish Chawla, secretary in the department of investment and public asset management (Dipam), confirmed on X that the government received an enthusiastic response. The green shoe option, which allows the government to sell additional shares, was fully exercised to meet investor demand.
This development is significant as it highlights robust investor appetite for public sector bank shares amid ongoing government efforts to divest stakes and raise capital. The successful OFS at Central Bank of India follows similar government disinvestment initiatives in the banking sector, aiming to improve public finances and enhance market participation. The reduction in government holding aligns with broader economic reforms targeting increased private sector involvement.
Looking ahead, the government will monitor the impact of this stake reduction on the bank’s governance and market performance. The proceeds from the OFS will support fiscal consolidation efforts. Investors and market watchers will be keen to see if further divestments or strategic moves are planned to bolster the banking sector’s growth and efficiency.