Govt Planning To Sell IRFC Shares Through Offer Of Sale: Official

The government is planning to sell a part of its holding in state-owned Indian Railway Finance Corp (IRFC) through an offer for sale (OFS) in the current fiscal, an official said on Wednesday, reports PTI.

The government currently holds an 86.36 percent stake in the financing arm of the Indian Railways.

The official said that an inter-ministerial group (IMG) comprising senior officers from the Department of Investment and Public Asset Management (DIPAM) and the Railways Ministry has started consultations to decide on the quantum of stake dilution, according to PTI.

To make the central public sector enterprise compliant to SEBI's minimum public shareholding (MPS) norm, the government has to dilute 11.36 percent stake in IRFC.

As per MPS norm, a listed entity must have a minimum public float of 25 percent within five years of listing.

"We are assessing investor appetite before deciding on the quantum of dilution," the official told PTI.
Shares of IRFC were trading at Rs 50.97 a share, up 0.14 percent over previous close on BSE.

As per PTI, At the current market price, sell of 11.36 percent would fetch the government around Rs 7,600 crore. The government had listed IRFC on stock exchanges in January 2021. The share sale consisted of fresh issue of shares by the company and an additional 4.55 percent stake dilution by the government.

IRFC reported a net profit of Rs 1,557 crore in the quarter ended June, down 6 percent from 1,660 crore in the corresponding quarter last fiscal. Shares of the company hit its lifetime high of Rs 52.70 in early trade on Wednesday. The share price has risen 38 percent this month, according to PTI.