Ircon shares tank 8% as govt’s OFS issue kicks off; stock up 166% YTD

Shares of Ircon International fell nearly 8 percent on December as the Government is selling an 8 percent stake, or 7.52 crore equity shares, in the infrastructure company via offer-for-sale (OFS) on December 7-8.

The OFS, with a floor price of Rs 154 per share, comprises a base issue size of 4 percent and a greenshoe option of 4 percent of shares. The issue opens for non-retail investors on December 7 and will open for retail investors on December 8. The OFS, if fully subscribed, would fetch about Rs 1,100 crore to the exchequer.

At 10:00 am, Ircon shares were trading 7 percent lower at Rs 158.75 on the National Stock Exchange. So far in 2023, the multibagger stock has rallied over 166 percent, outperforming benchmark Nifty 50 which has risen over 14 percent during this period.

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About 10% of the offer is reserved for retail investors. If the retail category is undersubscribed, those shares will be allotted to non-retail investors who have chosen to carry forward their unallotted bids to T+ l day.

“Those non-retail investors who have placed their bids on T Day and have chosen to carry forward their unallotted bids to T+1 Day, shall be allowed to carry forward for allocation to them in the unsubscribed portion of Retail Category (defined below) and also revise their bids on T+1 Day as per the OFS Guidelines,” said Ircon.

Meanwhile, 0.5% of the offer size is reserved for employees. The shares to employees will be given at the cut-off price in the retail category of the offer. The employees will be eligible to apply for equity shares up to Rs 2 lakh.

“Provided that in the event of under-subscription in the employee portion, the unsubscribed portion may be allotted on a proportionate basis, for a value in excess of Rs 2,00,000, subject to the total allotment to an employee not exceeding Rs 5,00,000,” the company said.

Also Read | Govt to sell upto 8% in IRCON, to raise Rs 1,100 crore

Ircon International, or Indian Railway Construction International Ltd, is an engineering & construction corporation, specialising in transport infrastructure. The government currently holds 73.18 percent stake in the firm.

So far in FY24, the government has raised Rs 8,859 crore by selling a minority stake in CPSEs. The Budget had set a target of Rs 51,000 crore to be mopped up from PSU disinvestment.

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