Govt to sell up to 8% stake in Ircon via OFS, fixes floor price at Rs 154 per share

DIPAM Secretary on Wednesday announed that government will sell up to 8% stake in Ircon International Ltd through an Offer For Sale (OFS). Floor price for the OFS has been fixed at Rs 154 per share, which is a 10% discount as compared to Ircon scrip's closing of Rs 171.65 on Wendesday. 52-week-low of the scrip is Rs 65 and 52-week-high is Rs 180.

The plan includes selling 4% of the company, with an option to sell an additional 4% if the offer is oversubscribed, it said in a stock exchange filing.

"Offer for Sale in IRCON opens tomorrow for Non Retail investors. Retail investors can bid on Friday. Govt. would divest 8% equity including Green Shoe option," posted DIPAM Secretary on X platform.

Ircon International, or Indian Railway Construction International Limited, is an engineering & construction corporation, specialized in transport infrastructure.

Government owns 73.18% in the engineering and construction company, and the 8% stake sale will help the government to raise about Rs 1,159 crore.

Centre has so far collected Rs 8,859 crore by selling shares in public sector units in 2023/24, compared with a target of Rs 51,000 crore.

About 10% of the offer is reserved for retail investors. If the retail category is undersubscribed, those shares will be allotted to non-retail investors who have chosen to carry forward their unallotted bids to T+ l day.

"Those non-Retail Investors who have placed their bids on T Day and have chosen to carry forward their unallotted bids to T+1 Day, shall be allowed to carry forward for allocation to them in the unsubscribed portion of Retail Category (defined below) and also revise their bids on T+1 Day as per the OFS Guidelines," said Ircon.

Meanwhile, 0.5% of the offer size is reserved for employees. The shares to employees will be given at the cut-off price in the retail category of the offer.

"The employees will be eligible to apply for Equity Shares up to Rs 2,00,000. Provided that in the event of under-subscription in the employee portion, the unsubscribed portion may be allotted on a proportionate basis, for a value in excess of Rs. 2,00,000, subject to the total allotment to an employee not exceeding Rs 5,00,000," said Ircon.

IDBI Capital Markets, BoB Capital Markets, and YES Securites are acting as brokers to the proposed OFS.