Government Initiates IRCON Stake Sale to Raise Rs 1,100 Crore
The Indian government’s offer for sale (OFS) of an 8% stake in IRCON International, a prominent railway engineering and construction firm, has witnessed an overwhelming response from investors, both institutional and retail. The government is selling well-nigh 7.53 crore probity shares at a floor price of Rs 154 per share, expecting to generate approximately Rs 1,100 crore for the exchequer. The two-day OFS began on December 7 for non-retail investors and will unshut for retail investors on December 8.
As per the Department of Investment and Public Asset Management (DIPAM) Secretary, the second day of the IRCON OFS saw considerable interest from retail investors, with a subscription rate of 3.01 times. The oversubscription indicates positive market sentiment and conviction in IRCON as an investment opportunity.
Institutional investors displayed significant enthusiasm on the first day of the OFS, putting bids for over 15.66 crore shares worth Rs 2,400 crore, oversubscribing the portion reserved for them by 4.63 times. This robust response underscores the request of IRCON’s probity among institutional investors.
IRCON International, an engineering and construction firm specializing in transport infrastructure, is a crucial player in the public sector. The government, currently holding a 73.18% stake in IRCON, aims to divest 8% through this strategic stake sale.
Shares of IRCON sealed at Rs 160.75 per piece, remaining unchanged from the previous day’s tropical on the Bombay Stock Exchange (BSE). The stock’s stability suggests that investors are reacting positively to the government’s stake sale, reflecting conviction in the company’s future prospects.
This move is part of the government’s broader disinvestment strategy, aiming to mobilize funds and enhance efficiency in the public sector. In the current fiscal year, the government has once raised Rs 8,859 crore through the sale of minority stakes in Central Public Sector Enterprises (CPSEs). The overall disinvestment target from PSU disinvestment, set by the Budget, is Rs 51,000 crore.
IRCON’s share sale is a strategic step in aligning with the government’s fiscal goals and optimizing its portfolio. The funds generated from this stake sale will contribute to the exchequer’s revenue, supporting various developmental initiatives and public welfare programs.
Investors are closely monitoring the developments, and the oversubscription signals a positive sentiment toward government disinvestment initiatives. As the OFS progresses, the market will be keenly observing the final subscription numbers and the subsequent impact on IRCON’s stock performance.
It is essential for investors to self-mastery thorough due diligence and seek translating from certified experts surpassing making any investment decisions. The government’s stake sale in IRCON represents an opportunity for investors to participate in a key player in the infrastructure sector with a proven track record.
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