IRFC IPO to fetch Rs 3,100 crore for firm, Rs 1,500 crore for Centre

The initial public offering (IPO) of state-run Indian Railway Finance Corporation (IRFC) will hit the market on January 18 to mobilise about Rs 4,600 crore for the company and the Centre. The price band for the IPO has been set at Rs 25-26 per equity share and the issue will close on January 20.

Prior to the IPO, anchor investors will be allocated up to 60% of the portion reserved for qualified institutional buyers (QIBs), a first for any central public sector enterprise (CPSE), on January 15 – to build investor confidence on the IPO.

The QIB category will not be allocated more than 50% of the net issue (after reducing the portion reserved for employees) size, retail individual investors not less than 35% and non-institutional category not less than 15%. The employee reservation portion is shares worth Rs 50 lakh. Post IPO, the government stake in the company could fall to 86.36%.

Bids can be made for a minimum of 575 equity shares and in multiples of 575 thereafter.

“IRFC coming up for listing with a Rs 4600 cr+ issue in a price band of Rs 25-26 per share. Anchor book on Jan 15 and the main book from Jan 18-20,”department of investment and public asset management secretary Tuhin Kanta Pandey tweeted on Wednesday.

The IPO will consist of up to 178.2 crore shares (worth Rs 4,455-4,633 crore based on the price band) with a face value of Rs 10 each. It will comprise a fresh issue of 118.8 crore equity shares (Rs 2,970-3,089 crore) by the company and an offer-for-sale of up to 59.4 crore shares by the Centre (Rs 1,485-1,544 crore).

So, the IPO could fetch roughly Rs 3,100 crore for the company and Rs 1,500 crore for the Centre.

The dedicated railways finance company plans to use the proceeds towards augmenting the company’s equity capital base to meet future capital requirements arising out of growth in business and general corporate purposes.