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Government Sets Stage for Partial Stake Sale in IRFC's Funding Arm

Aug 17, 2023

By: BlinkX Research Team

The government is contemplating divesting part of its stake in the state-owned Indian Railway Finance Corp (IRFC) to fulfill its annual divestment goals.

With ownership of just over 86% in the Indian Railways' financial arm, the government is yet to finalize the exact amount for sale, targeting a gradual sale of up to 11%.

Recent success includes the government's sale of over 5% of Rail Vikas Nigam, generating 13.66 billion rupees ($164.34 million).

In the ongoing fiscal year 2024, 56 billion rupees have been raised so far, aiming for 510 billion rupees. IRFC shares have surged 58% in the past month.

The potential sale aligns with regulator-mandated norms requiring public companies to maintain a minimum of 25% public shareholding, aiding the government in compliance.

While state-run enterprises have flexibility, the government aims to align its shareholding with these norms.

Content source: Media reports