Government to Divest Up to 4% Stake in Indian Railway Finance Corporation via Offer for Sale, Sets Floor Price at Rs 104 per Share

Indian Railway Finance Corporation (IRFC) Share Sale

Key Highlights

• The government will divest a 2% equity stake in Indian Railway Finance Corporation (IRFC) through an Offer for Sale (OFS) with an option to sell an additional 2% under a green shoe clause.
• The Offer for Sale (OFS) will open for non-retail investors on February 25 and for retail investors on February 26.

Sale Details

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• The government will sell up to 26.13 crore shares, representing 2% of the total issued and paid-up equity share capital of IRFC.
• There is an option to sell an additional 26.13 crore shares, representing another 2% of the total issued and paid-up equity share capital.
• The total stake sale could rise to 4% if the green shoe option is fully exercised.

Financial Projections

• The government would be able to garner approximately Rs 5,430 crore by offloading up to 4% stake in IRFC at a floor price of Rs 104 per share.
• The government currently holds an 86.36% stake in IRFC, which will reduce to 82.36% post the share sale.

Market Reaction

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• IRFC shares closed at Rs 109.40 on the NSE on February 24, down Rs 2.45 or 2.19% for the day.
• The floor price of Rs 104 is lower than the previous closing price, indicating the government is offering shares at a discount to attract investor participation.