The stock of Indian Railway Finance Corporation shed almost 4 percent of its value during early trade on the bourses on Wednesday. The state-owned company is in the process of an offer for sale (OFS).
The scrip opened at Rs 106 on Wednesday, 3 percent lower than its previous close of Rs 109. During trade, it further declined as much as 4 percent to Rs 105, which is close to its 52-week low of Rs 104.
The dilution in the stock price came as the government divested up to 4 percent of its stake in the company via an offer for sale, which opened today.
The offer is open for non-retail investors for now. From tomorrow onwards, it will be open for retail investors as well. While 2 percent of the Centre’s stake in the company will be divested, an equal share of stake will be offered through a green shoe option.
Global brokerage firm Goldman Sachs Securities is acting as the sole broker.
More than 26.13 crore equity shares of the company will be divested, with a face value of Rs 10. Another 26.13 crore shares can be further offloaded in case the offer gets oversubscribed.
The base price of the offer is fixed at Rs 104 apiece, valuing the total OFS at Rs 5,436 crore for a total of 4 percent divestment.
The central government currently holds a majority stake of 86.36 percent in the company, which is set to reduce to 82.36 percent.
The Miniratna company reported revenue of Rs 6,661.37 crore during the December quarter, while its net profit stood at Rs 1,802.19 crore in the same period.
Established in 1986, IRFC operates under the Union Ministry of Railways. It is the dedicated financing arm of the railways, raising funds from domestic and foreign investors to fund rolling stock and infrastructure needs.
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