Government is selling its stake in Central Bank of India, shares fell by 6% due to discount price

Friday brought a decline for investors of the public sector Central Bank of India. As soon as the market opened on Friday, heavy selling was seen in the bank’s shares in Bombay Stock Exchange (BSE) and they fell by about 6 percent to the level of ₹ 31.89. The main reason for this big fall in shares is the decision of the Central Government to sell its stake in the bank. The government has started the process of selling its stake through Offer for Sale (OFS) from Friday (22 May 2026), for which a discount of more than 8% has been fixed from the current market price. Government selling stake at floor price of ₹ 31 (OFS Details) The government has kept the offer for sale price very low to attract investors: Floor Price: The government is selling its stake in Central Bank of India through this OFS at the base price of ₹ 31 per share. The bank’s shares had closed at ₹33.91 on BSE on Thursday, compared to which this floor price is at a discount of more than 8%. How much stake will be sold: According to DIPAM, the government will initially sell 4 percent of its equity stake through this OFS. Apart from this, the government also has the ‘Green Shoe Option’ to sell 4 percent more stake. That means overall the government can sell up to 8% stake in the market. Bidding Timeline If you want to invest in this Offer for Sale, the government has set the following schedule for different investors: Non-Retail Investors: Institutional and large investors will be able to place their bids for this OFS from Friday, May 22. Retail Investors: General and small investors of the country can participate in the bidding process to buy this stake from Monday, May 25. Why is the government selling its stake? (Minimum Public Shareholding Norms) According to the data available on the stock exchange till March 31, 2026, the total stake of the Central Government in the Central Bank of India is 89.27 percent, while the public shareholding is only 10.73 percent. Compulsion of rules: According to the ‘Minimum Public Shareholding’ (MPS) rules of SEBI, it is mandatory for the public to have at least 25% stake in any listed company. To comply with this rule, the government will have to reduce its stake in the bank to 75%. This means that even after this 8% OFS, the government will have to sell 14.27 percent more stake in the coming time. Let us inform you that in August last year, the Central Government had appointed global financial firm Goldman Sachs as the transaction advisor to handle the disinvestment process in four public sector banks including the Central Bank of India. Only 72% return in 5 years, decline in 1 year. The track record of Central Bank of India shares has been a bit slow compared to other government banks: 5-year performance: The bank’s shares have seen a rise of only 72 percent in the last five years. The share which was trading at ₹18.50 on 21st May 2021 is trading at ₹31.89 today on 22nd May 2026. Annual Performance: If we look at the data of last one year, a decline of about 12 percent has been recorded in this stock. High and Low Level: The 52-week high of the bank’s shares is ₹41.18, while its 52-week low is ₹31.29. After Friday’s fall, the stock has reached very close to its lowest level.