Indian Government Raises ₹2,100 Cr from IRFC Share Sale, Boosts Disinvestment Goals
The Indian government has successfully raised nearly ₹2,100 crore from the share sale of state-owned Indian Railway Finance Corporation (IRFC), a significant move towards its disinvestment goals.
Govt Exercises Green Shoe Option, Raises ₹2,100 Cr from IRFC Share Sale
The Department of Investment and Public Asset Management (DIPAM) Secretary, Arunish Chawla, announced the successful completion of the Offer for Sale (OFS) for IRFC, which saw an enthusiastic response from retail investors.
The OFS for IRFC closed with 22.88 crore shares sold to minority shareholders over two trading days, raising an estimated ₹2,084 crore. This marks a significant milestone in the government’s disinvestment efforts, with a total of ₹16,480 crore raised in the current fiscal.
Key Details of the IRFC Share Sale
The government decided to exercise the green shoe option, allowing a 2% stake dilution in the public sector undertaking (PSU) of the Railway Ministry. The floor price of ₹91 per share was fixed, at a discount of 7.8% over Tuesday’s closing price of IRFC shares on the BSE.
Market Impact and Disinvestment Proceeds
- The sale of IRFC shares has contributed significantly to the government’s disinvestment goals, with a total of ₹16,480 crore raised in the current fiscal.
- The government has sold minority stakes in five other central public sector enterprises, banks, and insurance companies, including Coal India, NHPC, GIC, Central Bank of India, and NLC India.
- The disinvestment proceeds from these sales include ₹5,542 crore from Coal India, ₹4,357 crore from NHPC, ₹3,090 crore from GIC, ₹2,266 crore from Central Bank of India, and ₹1,223 crore from NLC India.
Key Takeaways
- The Indian government has successfully raised ₹2,100 crore from the share sale of IRFC.
- The OFS for IRFC saw an enthusiastic response from retail investors, with 22.88 crore shares sold over two trading days.
- The government has raised a total of ₹16,480 crore through disinvestment in the current fiscal.
FAQs
What is the significance of the IRFC share sale?
The IRFC share sale is a significant move towards the government’s disinvestment goals, with a total of ₹16,480 crore raised in the current fiscal.
What is the green shoe option, and how was it exercised in this case?
The green shoe option allows the government to dilute a 2% stake in the PSU of the Railway Ministry. In this case, the government exercised this option, allowing for the sale of additional shares at the floor price of ₹91 per share.
What are the total disinvestment proceeds from the sale of minority stakes in other central public sector enterprises, banks, and insurance companies?
The total disinvestment proceeds from these sales include ₹5,542 crore from Coal India, ₹4,357 crore from NHPC, ₹3,090 crore from GIC, ₹2,266 crore from Central Bank of India, and ₹1,223 crore from NLC India.
Conclusion
The successful completion of the IRFC share sale marks a significant milestone in the government’s disinvestment efforts. With a total of ₹16,480 crore raised in the current fiscal, the government is on track to meet its disinvestment goals. As the government continues to pursue its disinvestment agenda, investors and stakeholders can expect further opportunities to participate in the growth and development of India’s economy.
