Govt to divest up to 4% stake in IRFC via OFS, sets floor price at Rs 104 per share

Ahead of the announcement, IRFC shares closed at Rs 109.40 on the NSE on Tuesday, February 24, down Rs2.45 or 2.19% for the day.

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 Department of Investment and Public Asset Management (DIPAM) Secretary said.

“The government will divest a 2% equity stake in the company through an Offer for Sale (OFS), with an additional green shoe option of 2%,” the DIPAM Secretary said.

“The floor price for the OFS has been set at Rs 104 per share.”

At Rs 104 per unit, the government would be able to garner about Rs 5,430 crore by offloading up to 4 per cent stake in the company under the Ministry of Railways.

The government proposes to sell up to 26.13 crore (26,13,70,120) shares or 2 per cent base offer size with an option to additionally sell 26.13 crore shares, representing another 2 per cent of the total issued and paid up equity share capital of the company, it said.

The government currently holds an 86.36 per cent stake in the company. Post the share sale, the government's stake will reduce to 82.36 per cent.

In a post on X,DIPAM Secretary wrote," Offer for Sale for Indian Railway Finance Corporation (IRFC) opens tomorrow for Non-Retail investors. Retail investors can bid on Thursday. Government offers to disinvest 2% equity in the IRFC with an additional 2% as green shoe option."

The OFS will open for non-retail investors on February 25, while retail investors can place bids on February 26. If the green shoe option is fully exercised, the total stake sale could rise to 4%.

Ahead of the announcement, IRFC shares closed at Rs 109.40 on the NSE on Tuesday, 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.