Shares of Indian Railway Finance Corporation Ltd (IRFC) fell 6 per cent in Friday's trade as the government was planning to sell a part of its holding in the financing arm of the Indian Railways through an offer for sale (OFS) in the ongoing financial year. The government held 86.36 per cent stake in the state-owned company as on June 30.
The stock, which hit a record high of Rs 52.71 in the previous session, fell 5.66 per cent to hit a low of Rs 48.29 on BSE. IRFC shares are up 49 per cent year-to-date and 130 per cent in the last one year.
"The stake sale would take place soon," a government official quoted by Reuters said. The official added that while the government is yet to decide the exact quantum of sale, it will aim to sell up to 11.36 per cent in multiple tranches, as per the plan so far. At the current market price, sell of 11.36 per cent would fetch the government around Rs 7,600 crore.
To make the central public sector enterprise compliant with Sebi’s minimum public shareholding (MPS) norm, the government has to dilute its 11.36 per cent stake in IRFC.
As per MPS norm, a listed entity must have a minimum public float of 25 per cent within five years of listing.
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IRFC got listed on stock exchanges in January 2021. The share sale consisted of a fresh issue of shares by the company and an additional 4.55 per cent stake dilution by the government.
As per estimates, a sale of 11.36 per cent stake would fetch the government around Rs 7,600 crore at the prevailing market price.
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