Shares of Indian Railway Finance Corporation (IRFC) plunged on Thursday, a day after the government planned to sell a portion of its holdings to the state-owned company through an offer for sale (OFS) in the current fiscal (FY24). IRFC shares opened at Rs 50 on NSE. The counter saw profit bookings and slipped nearly 6 percent to touch the day-low of Rs 48.25 on the NSE. The counter was trading at Rs 2.05 or 4 percent lower at Rs 49.2 on the NSE.
Commenting on the counter, Sumeet Bagadia of Choice Broking said the stock could witness profit booking and a corrective move from the current level. The stock is stuck in a narrow range between Rs 52-47.
The government currently holds 86.36 percent stake in the financing of Indian Railways. According to a PTI report, a government official said that an inter-ministerial group (IMG) comprising senior officials of the Ministry of Investment and Public Asset Management (DIPAM) and Railways has started consultations to determine the quantum of share reduction.
To bring the central public sector enterprise as per Sebi’s minimum public shareholding (MPS) rules, the government will have to reduce its stake in IRFC to 11.36 percent. According to MPS rules, listed companies must have a minimum of 25 percent public float within five years of listing.
“We are assessing investor appetite before determining the amount of cuts,” the official told PTI. Selling 11.36 per cent at the current market price will earn the government around Rs 7,600 crore. The share sale includes issuing new shares of the company and reducing the additional 4.55 percent stake by the government.
