Retail and non-retail investors will closely track the share price movement of Indian Railway Finance Corporation (IRFC) over the next two trading sessions, as the Government of India launches an Offer for Sale (OFS) to divest up to 2% stake, with a green shoe option to sell an additional 2%.
The floor price for the issue has been fixed at ₹104 per share.
IRFC serves as the dedicated financing arm of Indian Railways. The stake sale is aimed at complying with the Securities and Exchange Board of India’s (SEBI) minimum public shareholding (MPS) norms, which mandate at least 25% public float in listed companies.
At present, the Government of India holds 86.36% in IRFC. Post the base offer of 2%, its holding will decline to 84.36%, and further to 82.36% if the green shoe option is fully exercised.
The last traded price of IRFC shares on the exchanges stood at ₹109 apiece. With the OFS priced at a discount to the prevailing market price, market participants expect healthy investor interest, particularly from institutions and retail investors looking to consolidate holdings, according to a merchant banker.
As per the notification, the OFS opens for non-retail investors, including qualified institutional buyers (QIBs), on February 25. Retail investors, employees and non-retail investors can bid on February 26.
The government proposes to sell up to 26.13 crore shares, with an option to offload an additional 26.13 crore shares under the green shoe mechanism. At the floor price, the total proceeds could reach approximately ₹5,430 crore if the full 4% stake is divested.