Ircon International shares plunge 7% as two-day OFS kicks off

NEW DELHI: Ircon International shares tanked 7 per cent on Wednesday after the company kicked off a two-day offer for sale (OFS).

The stock fell as the floor price of Rs 88 the government set for selling up to 16 per cent stake in the railway PSU came in at a 10.06 per cent discount to Tuesday's closing price of Rs 97.85 on BSE. At the floor price, a 16 per cent stake would fetch over Rs 600 crore to the exchequer.

Following the development, the stock fell 6.69 per cent to hit a low of Rs 91.30.

The base issue size of the OFS is 10 per cent or over 4.70 crore equity shares, with a green-shoe option to retain over-subscription of 6 per cent or more than 2.82 crore shares. The total issue size, including the green-shoe option, comes to 16 per cent or over 7.52 crore shares.

The government holds an 89.18 per cent stake in Ircon, which comes under the Railways Ministry and is engaged in the construction of transportation infrastructure.

Only non-retail investors can participate on the first day of the issue. Retail investors can participate in the issue on the second day.

The government has set a disinvestment target of Rs 32,000 crore in its Revised Estimates for FY21. So far, it has realised Rs 20,626 crore through sale of minority stakes in CPSEs and share buybacks.