Why does Coal India’s share price keep falling despite improving fundamentals? One prime suspect is increasing share issuances. The government has brought down its stake from 80 percent in December 2017 to 72.91 percent in December 2018.
It has offloaded close to 35 crore shares, leading to about 50 percent increase in its free float or non-promoter shares in the market. This is huge by any standard and is a massive overhang on a stock that has daily volumes of about a crore shares.
The market is also worried about the subsequent supply through PSU exchange traded funds (ETFs). In February, the government concluded selling its stake through the next tranche of Bharat-22 ETF, retaining Rs 10,000 crore, more than 2.8 times of the original issue size. Read More