IRFC IPO will recover Rs 3,100 crore for the company, Rs 1,500 crore for the center

The state-run Indian Railway Finance Corporation (IRFC) Initial Public Offering (IPO) will hit the market on January 18 to raise around Rs 4,600 crore for the company and the Center. The price range for the IPO has been set at Rs 25-26 per share and the issue will close on January 20.

Ahead of the IPO, benchmark investors will be allocated up to 60% of the Qualified Institutional Buyer (QIB) share, a first for any central public sector company (CPSE), on January 15 – to bolster investor confidence on the IPO.

The QIB category will not be allocated more than 50% of the size of the net issue (after reduction of the portion reserved for employees), individual retail investors not less than 35% and the non-institutional category not less than 15 %. The part reserved for employees consists of shares worth Rs 50 lakh. After the IPO, the government’s stake in the company could drop to 86.36%.

Offers may relate to a minimum of 575 Equity Shares and in multiples of 575 thereafter.

“IRFC comes on the listing with an issue of Rs 4,600 cr + in a price range of Rs 25 to 26 per share. Anchor book for January 15 and main book for January 18-20, ”the secretary of the investment and public asset management department, Tuhin Kanta Pandey, tweeted on Wednesday.

The IPO will consist of up to 178.2 crore shares (valued at Rs 4,455-4,633 crore depending on price range) with a par value of Rs 10 each. It will include a new issue of 118.8 crore shares (Rs 2,970-3,089 crore) by the company and an offer to sell up to 59.4 crore of shares by the Center (Rs 1,485-1 544 crore).

Thus, the IPO could bring in around Rs 3,100 crore for the company and Rs 1,500 crore for the Center.

The railroad finance company plans to use the proceeds to increase the company’s equity to meet future capital needs arising from growing business and general business goals.