The three-day initial public offer (IPO) of Indian Railway Finance Corporation (IRFC) will open today, and will culminate on Wednesday, January 20. With an aim to raise approximately Rs 4,633.4 crore, at the upper end of the price band of Rs 25-26 apiece, the state-owned entity wishes to deploy the funds towards augmenting the company’s equity capital base to meet business future growth requirements; and towards meeting general corporate purposes.
According to the offer, the government (which currently holds 100 per cent stake) will execute an offer for sale (OFS) for approximately 594 million shares worth Rs 1,480 crore. Post IPO, Centre's stake will come down to 86.4 per cent. Additionally, the issue comprises of fresh issue of 1,188 million shares, aggregating to around Rs 2,970 crore.
Investors can apply for the issue in lots of 575 shares, and in multiples thereof. The offer is 50 per cent reserved for Qualified Institutional Buyers; 15 per cent for Non-Institutional Investors; and 35 per cent for Retail Individual Investors. It must be noted that 5 million equity shares have been reserved for the firm's employees.
Here's why you should subscribe to the issue:
Monopoly: Incorporated in 1986, IRFC is a dedicated government entity engaged in financing the acquisition of rolling stock assets (wagons, trucks, electric multiple units, locomotives, coaches), leasing of railway infrastructure assets, and lending to entities under the Ministry of Railways (MoR), expansion plans, and asset management.
As per an IPO note by Sharekhan, IRFC financed an amount of Rs 71,392 crore, accounting for 48.22 per cent of the actual capital expenditure of the Indian Railways in FY20. In FY18, FY19, FY20, and in H1FY21, IRFC financed rolling stock assets worth Rs 18,669.8 crore, Rs 24,055 crore, Rs 33,544.1 crore, and Rs 10,816.3 crore, respectively.
No comments:
Post a Comment