Shares of PSU Indian Railway Finance Corporation (IRFC) fell sharply in early trade on Thursday after an official quoted in a report said the government is considering a stake sale.
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IRFC shares were down over 4 per cent at around 9:30 am following the development.
An official indicated that the government is considering a proposal to offload a part of its 86.36 per cent stake in the PSU through an offer-for-sale (OFS) in the ongoing financial year. “The stake sale would take place soon,” a government official quoted by news agency Reuters said.
The government is still finalising the precise amount for the sale, but the intention is to divest up to 11.36% in several installments, according to the official’s statement.
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Based on the current market value, this stake sale could yield approximately Rs 7,600 crore for the government.
To adhere to Sebi’s minimum public shareholding (MPS) requirement, the government needs to reduce its current 11.36 per cent stake in IRFC, a central public sector enterprise.
According to the MPS rule, a listed company must achieve a minimum public float of 25 per cent within five years of its listing.
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In January 2021, IRFC was introduced to the stock exchanges. The initial public offering included new shares from the company and a further dilution of the government’s stake by 4.55 per cent.
