Coal India shares drop 6% after OFS launch. Buy the dip or wait? Here’s what technical indicators suggest

The shares of Coal India tumbled more than 6% on Wednesday after the company fixed the floor price for its Rs 5,000 crore offer for sale (OFS) at a 10% discount to the previous closing price, with analysts suggesting technical levels for investors to watch out for.

The shares of the company dropped to Rs 428.40 apiece in the morning trading hours of Wednesday. If the stock manages to hold these losses till the end of the session, then this would mark the sharpest single-day fall since June 2024.

Coal India on Tuesday announced that the government will sell 6.16 crore equity shares, representing 1% of its total paid-up equity capital, as the base offer size. The government also retains an oversubscription option to sell an additional 6.16 crore shares, taking the total potential offer size to 12.32 crore shares or 2% equity. At the floor price of Rs 412 per share, this would be worth more than Rs 5,000 crore.


Also read | Govt to offload up to 2% stake in Coal India via OFS on May 27-29; floor price at Rs 412/share

The offer opened for non-retail investors on May 27, while retail investors, eligible employees and non-retail investors carrying forward unallotted bids can participate on May 29, after the market holiday on May 28.

Technical levels for Coal India share price

Coal India’s near-term chart has turned cautious, but it is not structurally broken, said Harshal Dasani, Business Head at INVasset PMS. He explained that the stock is reacting to a clear supply event - the government’s OFS, with the floor price set at Rs 412, at a 10% discount to the previous closing level. “That has shifted the price action from a steady uptrend into a support test,” he said.

For investors, the first important price band to watch now is around Rs 428 to Rs 430, according to Dasani. “If the stock absorbs supply there and closes above it, the chart can still form a higher base rather than slipping into a deeper correction,” he said.

However, a close below Rs 428 would weaken the setup and bring the OFS floor near Rs 412 into focus as the next reference point, he added. On the upside, the analyst sees the stock finding immediate resistance around Rs 455 and then at Rs 460, because that is where the stock broke down from after the supply announcement. The broader trend would need a reclaim of that band before momentum improves again, he said, adding that the 52-week high near Rs 491 remains the larger resistance marker.

“For now, Coal India remains a dividend-led, value-heavy chart facing a temporary supply overhang. The next signal is not the bounce itself, but whether the market absorbs the extra supply without significant damage to volume,” the analyst concluded.

Coal India share price

Coal India shares have fallen around 5% in one week and more than 3% in one month. Overall, the share price of the miner has gained more than 9% so far in 2026.

In the longer term, the company's stock gained over 9% in one year, 81% in three years and 202% in five years. The company has a market capitalisation of nearly Rs 2.7 lakh crore.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)