That stake would be worth as much as Rs 24,000 crores at current market prices.
The government, which owns close to 90% of the coal miner, is selling 315.8 million shares with an option to sell another 315.8 million, according to a notice to the exchanges on Wednesday.
The stake sale is part of a government plan to raise about Rs 60,000 cr in asset sales during the current fiscal year to end-March.
The floor price will be declared at 5 pm tomorrow.
25% of the Offer For Sale is reserved for mutual funds, insurance companies.