Modi government to sell up to 2 percent stake in IRFC OFS, retail investors can bid on this date, full details here
Indian Railway Finance Corporation serves as the dedicated financing arm of Indian Railways, which was established on December 12, 1986.
New Delhi: In a major development, the Modi government will sell up to a 2 percent stake in Indian Railway Finance Corporation (IRFC) through an Offer for Sale (OFS). The bidding window for non-retail investors will open on Wednesday, while retail investors will get an opportunity to participate on Thursday. The Department of Investment and Public Asset Management (DIPAM) announced the move in a post on the social media platform X on Tuesday.
The stake sale includes a base offer of 1 percent equity in the railway financing company. If investor demand is strong, an additional 1 percent stake may be offered under the green shoe option.
Check Key Details Here
- Floor Price: Rs 91 per share
- Current Market Price (CMP): Rs 98.69 per share
- Stock Trend: The stock has been in a downtrend over the past two years
- Previous OFS: Conducted at a floor price of Rs 104 per share
On Tuesday, IRFC shares closed 2.53 percent lower at Rs 98.69 per share on the BSE.
How the Company Is Linked to Indian Railways
Indian Railway Finance Corporation serves as the dedicated financing arm of Indian Railways, which was established on December 12, 1986. The company raises funds from both domestic and international capital markets to support the expansion and infrastructure development projects of Indian Railways.
This Navratna public sector company operates under the Ministry of Railways. It is registered with the Reserve Bank of India (RBI) as a Systemically Important Non-Deposit Taking Non-Banking Financial Company (NBFC) and as an Infrastructure Finance Company (IFC).
Over more than three decades, IRFC has become a key source of extra-budgetary resources for Indian Railways by raising funds from financial markets and financing the purchase and creation of railway assets.
Utilisation of Funds Raised
According to the company, the funds raised are primarily used to purchase rolling stock and support railway infrastructure projects.
IRFC has financed the purchase of:
- 13,764 locomotives
- 76,735 passenger coaches
- 2,65,815 wagons
This accounts for nearly 75 percent of Indian Railways' total rolling stock fleet. Since 2011 12, the company has also expanded its role to funding railway projects, capacity augmentation works, and projects with forward and backward linkages to the railway sector.
IRFC has diversified its borrowing sources through taxable and tax-free bonds, bank loans, financial institution funding, and offshore borrowings. This has helped it meet its annual funding requirements at competitive rates.
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