IRFC Shares Plunge as Government Launches Offer to Sell Up to 2% Stake in Railway PSU
Shares of Indian Railway Finance Corporation (IRFC) dropped by 5% on June 24, following the government's announcement that it plans to sell up to a 2% stake in the railway public sector undertaking. The market reacted negatively to the news of potential disinvestment via an Offer for Sale (OFS).The targeted two-day share sale will put up to 26.13 crore shares on offer. At the stated floor price, this divestment is projected to bring over ₹2,300 crore to the national exchequer.
Details of IRFC Offer for Sale (OFS)
The government has set the floor price for the stake sale at ₹91 per share. This floor price represents a 7.79% discount compared to Tuesday's closing price on BSE.Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla confirmed the plan via X, stating that the government intends to disinvest 1% equity in IRFC. An additional 1% is offered as a green shoe option.
The OFS process will commence with Non-Retail investors on the following day. Retail investors are scheduled to participate in bidding starting Thursday. At 9:35 am on June 24, IRFC shares were trading at ₹93.89 apiece, registering a decline of 4.8%.
Government Disinvestment Portfolio Performance
The current fiscal year has seen the government successfully sell minority stakes in five central public sector enterprises and financial institutions. These sales have generated a total disinvestment proceed of ₹16,480 crore to date.The proceeds from these various disinvestments include ₹5,542 crore from Coal India. NHPC contributed ₹4,357 crore to the government fund in this fiscal year. Other significant contributions came from GIC with ₹3,090 crore.
Breakdown of PSU Stake Sales
Further details on the sales portfolio provided by DIPAM include Central Bank of India and NLC India. Proceeds generated from the sale of a stake in Central Bank of India amounted to ₹2,266 crore. The government also received ₹1,223 crore from the disposal of stakes in NLC India.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
The information provided is for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Readers are advised to rely on their own assessment and judgment and consult appropriate financial advisers, if required, before taking any investment-related decisions.
Any views, opinions, or statements expressed, where applicable, are those of the respective analysts or experts and do not reflect the views of this website. The website has no association with such viewpoints and does not assume any responsibility for them.