Government to sell up to 16% stake in IRCON via OFS, the issue opens today

Union Government has plans to sell up to 16 per cent of its stakes in IRCON International through an offer for sale (OFS) today, i.e. March 3, 2021. The government seeks to raise around Rs 662 crore through stake sales. The floor price for the offer has been fixed at Rs 88 per share.

The base issue size of the OFS is 10 per cent or over 4.70 crore equity shares, with a green-shoe option to retain over-subscription of 6 per cent or over 2.82 crore shares. The total issue size, including the green-shoe option, comes to 16 per cent or over 7.52 crore shares.

The government holds an 89.18 per cent stake in IRCON, which is under the Railways Ministry and into the construction of transportation infrastructure. Retail investors can subscribe to the OFS on Thursday while non-retail investors can put their bids on Wednesday.

Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM) on Tuesday tweeted: "Offer for Sale in IRCON opens tomorrow for Non-Retail Investors. Day 2 for Retail Investors. Govt. would divest 10% equity with an additional 6% as Green Shoe option".

In a regulatory filing to stock exchanges, IRCON said, "The Promoter proposes to sell up to 4,70,25,787 Equity Shares of the Company, (representing 10% of the total issued and paid-up equity share capital of the Company) ("Base Offer Size"), on March 03, 2021, ("T day") (for non-Retail Investors only) and on March 04, 2021 ("T+1 day") for Retail Investors and for non-Retail Investors who choose to carry forward their un-allotted bids with an option to additionally sell 2,82,15,473 Equity Shares (representing 6% of the total issued and paid-up equity share capital of the Company)."

The government has set a disinvestment target of Rs 32,000 crore in the Revised Estimates for the current fiscal. So far, it has realised Rs 20,626 crore through minority stake sale in CPSEs and share buybacks.