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Railway CPSE Ircon to raise funds by issuing fresh equity, diluting govt stake
Railway CPSE Ircon International plans to raise funds by issuing fresh equity shares, piggybacking on the government's proposal to dilute its stake to 75 per cent through follow-on public offer route, an official said.
Railway CPSE Ircon International plans to raise funds by issuing fresh equity shares, piggybacking on the government's proposal to dilute its stake to 75 per cent through follow-on public offer route, an official said. The government, which holds 89.18 per cent stake in Ircon International, is required to bring it down to 75 per cent under the Sebi's minimum public shareholding norms.
The Cabinet has already approved the finance ministry's proposal to reduce government shareholding to 75 per cent in the railway firm. However, with Ircon planning fresh issuance of shares, the Cabinet will have to vet the company's proposal for issuance of additional equity. "In view of the proposal of Ircon to raise funds through fresh equity issuance, it has been decided to keep in abeyance the Offer For Sale (OFS) decision of the government. Once the Cabinet approves the proposal, an FPO would be launched for lowering government stake and issuing fresh equity by the company," an official told PTI.
The quantum of stake dilution by the government will be decided on the basis of the number of fresh shares the company issues, the official added.
Railway engineering firm Ircon got listed on the bourses last fiscal and its initial public offering (IPO) had garnered Rs 467 crore. The scrip listed at Rs 410.30 on the BSE. Shares of Ircon closed at Rs 381.55 apiece on the exchange Friday. Last week, the government said it is planning to divest up to 15 per cent stake in another railway PSU RITES through OFS, which could fetch around Rs 700 crore, based on the current market price, to the exchequer.
The government has budgeted to raise Rs 90,000 crore from CPSE disinvestment in the current fiscal. It has so far raised Rs 2,350 crore from IPO of Rail Vikas Nigam Ltd (RVNL) and sale of 'enemy property'. Enemy property refers to the assets left behind by people who migrated to Pakistan or China and are no longer citizens of India.
The government is also aiming to launch initial public offering of state-owned RailTel Corp India, Indian Railway Catering and Tourism Corp (IRCTC) and Indian Railway Finance Corp (IRFC) this fiscal.
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