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A very important news is coming for stock market investors and those interested in railway stocks. The Central Government has taken a major decision regarding the government company ‘Indian Railway Finance Corporation’ (IRFC), which is considered the financial backbone of Indian Railways. The government has made full preparations to sell up to 2 percent of its stake in this Navratna company through ‘Offer for Sale’ (OFS). Through this disinvestment, the government aims to raise a huge fund from the market. If you also invest in the stock market or are looking for a great earning opportunity, then this news can prove to be very beneficial for you.
What is the government’s complete plan and ‘greenshoe option’?
A detailed plan regarding this stake sale has been shared by the Central Government. According to the decided strategy, the government will initially offer 1 percent equity stake of IRFC for sale in the market. If this stake gets an excellent response from investors and the demand is high, then the government will use the ‘Greenshoe Option’. Under this option, additional 1 percent stake will be sold. That means overall 2 percent shares will be available to investors in the market.
‘DIPAM’ gave information, know when this opportunity will open for you
The Department of Investment and Public Asset Management (DIPAM), while sharing official information on social media platform ‘X’ (earlier Twitter), said that this ‘Offer for Sale’ (OFS) is going live for investors from Wednesday.
Its timetable is divided into two parts:
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Wednesday (1st day): On this day only non-retail i.e. institutional investors will be able to bid for shares.
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Thursday (2nd day): This window will open on Thursday for the general public i.e. small and retail investors like us and you, where they will be able to apply for shares at cheaper prices.
Huge discount from market price: floor price fixed at Rs 91
The most attractive thing about this offer for sale is its price. The government has fixed the ‘floor price’ (minimum price) for this sale at Rs 91 per share. It is worth noting that in the last trading session i.e. when the market closed on Tuesday, the share of IRFC was trading at Rs 98.37. This simply means that the government is offering shares to common investors at an attractive discount of about 7.5% from the current market price. A total of 26.13 crore shares are expected to be sold under this entire process, which will bring in more than Rs 2,300 crore to the government exchequer.
Why is this step necessary for the government?
‘Offer for Sale’ (OFS) is a simple mechanism under which the promoter of any listed company (in this case the Government of India) can sell its stake directly to general and institutional investors through the stock exchange. Even before this, the government had tried to sell its 4 percent stake in IRFC, but due to market conditions, only 1.71 percent shares could be sold.
At present the total stake of the government in this company is 84.65 percent. In fact, the Central Government has set a big target of raising a total of Rs 80,000 crore through disinvestment in the budget of this current financial year (FY27). This recent step of selling stake in IRFC is an important part of achieving this big target.
