Govt selling 8% equity in Ircon; sets base price at Rs154 a share

The central government has come out with an offer to sell up to eight per cent equity in Navratna public sector undertaking Ircon and has set the floor price at Rs154 per share. At this floor price the stake sale is expected to fetch more than Rs1,200 crore for the government.

The base issue size of the OFS is four per cent, which comes to  over 3,76,20,629 equity shares, with a green-shoe option to retain an additional four per cent from the over-subscription part.

The total issue size thus adds up to eight per cent, or over 7,52,41,258 shares.

"Offer for sale in Ircon opens tomorrow for non-retail investors. Retail investors can bid on Friday. Government would divest 8 per cent equity, including Green Shoe option," Tuhin Kanta Pandey, secretary in the Department of Investment and Public Asset Management (DIPAM), said on Wednesday.

Ircon, a public sector undertaking under the ministry of railways, said in a regulatory filing that the issue will open on Thursday. 

The floor price of Rs154 is at a discount of over 10 per cent from Wednesday's closing price. Ircon shares closed at Rs172, down 0.81 per cent on the NSE on Thursday. The stock has gained over 190 per cent so far this year.

The government holds 73.18 per cent equity stake in Ircon, which has a market capitalisation of Rs15,029.44 crore. 

Ircon is an integrated engineering and construction company that specialises in infrastructure projects, including highways, railways, bridges, tunnels, flyovers, and other activities, while a major part of its revenue comes from the railway.

The government has so far raised Rs8,858 crore through disinvestments in Coal India, Hindustan Aeronautics Ltd, Hudco, Rail Vikas Nigam, and SJVN. It has set a divestment target of Rs51,000 crore for FY24.