Government Targets ₹1,200 Cr with 8% IRCON Stake Sale at ₹154/Share via OFS

The central government is set to sell up to an 8% stake in IRCON International through an offer for sale (OFS). This move aims to reduce its ownership from the current 73.18%, allowing the government to raise approximately ₹1,159 crore. The floor price for the OFS has been fixed at ₹154 per share, representing a discount of about 10.5% to the closing price on Wednesday. The government plans to initially sell 4% of the company's shares, with an option to sell an additional 4% if the offer is oversubscribed. So far in the fiscal year 2023/24, the government has collected ₹8,859 crore from share sales in public sector units, from the target ₹51,000 crore.

OFS Details

The offer for sale will take place on 7-Dec-2023 (T Day), and continue the next day during the same time frame (9:15 am to 3:30 pm). Non-retail investors can place their bids on T Day, retail investors and non-retail investors opting to extend their unallotted bids have the opportunity to participate in the offering on December 8, Friday.

For employees, 0.5% of the offer size is reserved. Shares allocated to employees will be at the cut-off price in the retail category. Employees are eligible to apply for equity shares up to ₹2,00,000. In case of undersubscription, the unsubscribed portion may be allotted proportionately. However, if an employee wishes to apply for a value exceeding ₹2,00,000, they may be considered for the unsubscribed portion, subject to a maximum total allotment of ₹5,00,000 per employee.

Stock performance

IRCON's stock recently dipped by 7.44% following the latest news. Over the past month, despite today's decline, it showed an overall positive return of 4.43%. Looking back six months, the stock surged by 83%, and in the last year, it rose 145%. Since its 2018 listing, IRCON's stock has soared by 283%. The 52-week low and high are ₹65 and ₹180, respectively, giving a snapshot of its performance in the last year.

IRCON Business Overview

IRCON International, also known as Indian Railway Construction International Limited, is a specialized engineering and construction corporation focusing on transport infrastructure. It operates under the Railways Ministry and plays a key role in the development of transportation infrastructure.

The government's move to sell its stake in IRCON International aligns with broader disinvestment objectives, providing investors with an opportunity to participate in the growth of the transport infrastructure sector.