Government Launches OFS To Sell Up To 8% Stake In Central Bank Of India

The government will sell up to an 8% stake in Central Bank of India through an Offer for Sale (OFS), with bidding for institutional investors scheduled to begin on Friday, May 23.

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Disinvestment Secretary Arunish Chawla announced the stake sale plan in a post on the social media platform X late on Thursday. According to the announcement, the government will initially divest 4% equity in the state-owned lender, with an additional 4% available under the greenshoe option.

The OFS will open for non-retail investors on Friday, while retail investors will be able to participate in the issue on Monday. Based on the bank’s closing share price on Thursday, the proposed sale could mobilise nearly ₹2,455 crore for the government if the greenshoe option is fully exercised.

Government Holding Remains Above Public Shareholding Norms

As of March 31, 2026, the government held an 89.27% stake in Central Bank of India, according to exchange filings. The proposed share sale would reduce the Centre’s ownership and improve public shareholding in the bank.

Listed public sector banks are required to gradually increase public float to meet minimum shareholding norms prescribed by the market regulator Securities and Exchange Board of India (SEBI).

Central Bank of India shares have seen active movement in recent sessions amid broader interest in public sector banking stocks. The OFS route allows the government to dilute its holding through the stock exchange platform in a time-bound manner.

OFS Mechanism And Participation

Under the OFS framework, institutional investors place bids on the first day of the issue, while retail investors are allowed to bid on the following trading day. The process is commonly used by the government for stake dilution in listed public sector companies.

The government has used the OFS mechanism multiple times in recent years as part of its broader disinvestment programme aimed at raising non-tax revenue and improving market participation in state-run enterprises.

Central Bank of India, one of the country’s oldest public sector lenders, reported steady business growth during FY26 amid continued expansion in advances and deposits. The bank remains majority-owned by the government even after the proposed share sale.

The transaction comes as the Centre continues efforts to monetise holdings in public sector companies while maintaining management control in strategic financial institutions.