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Informist, Tuesday, Apr. 22, 2025

 

--Source: Govt may sell around 12% stake in IRFC in FY27

--Source: Fin min officials recently held talks with IRFC on stake sale

 

By Priyasmita Dutta, Shubham Rana, and Sagar Sen

 

NEW DELHI – The government is looking to sell around 12% stake in Indian Railway Finance Corp. Ltd. in 2026-27 (Apr-Mar), a senior company official said. "The Department of Investment and Public Asset Management has held discussions with IRFC recently, and the entire process will take another year or one-and-a-half years," the official told Informist. 

 

The government currently holds 86.36% stake in the state-owned railway financier. According to the Securities and Exchange Board of India's Securities Contract (Regulation) Rules, all listed companies, including public sector companies, must have a minimum public shareholding of 25%. The government had in July extended the deadline for state-owned companies to meet the minimum public shareholding norm by Aug. 1, 2026.

 

It is imperative for the government to reduce its stake in IRFC as the company has been eyeing a 'Maharatna' status, which can only be assigned if the public shareholding is over 25%. Last month, the government granted 'Navratna' status to IRFC.

 

The government had launched the initial public offering of IRFC in FY21 by divesting 4.55% stake through an offer-for-sale of 594.02 million equity shares and fresh issuance of 1.19 billion equity shares by the company. Thereafter, the government has not sold any stake in the company.

 

IRFC was set up in 1986 as a dedicated financing arm of the Indian Railways to raise funds from domestic as well as overseas markets. The company is registered as a systemically important non–deposit-taking, non-banking financial company and infrastructure finance company with the Reserve Bank of India.

 

As of Dec. 31, the company's total assets under management were INR 4.61 trillion. During Apr-Dec, the company's net profit rose 2.7% on year to INR 48.20 billion. Total revenue from operations was INR 204.28 billion, up 1.3% on year, while total expenses increased 0.8% to INR 156.12 billion. At 1255 IST, shares of the company were up 0.7% at INR 132.35 on the National Stock Exchange.

 

According to the company's charter, it can fund any entity which has backward or forward linkage with Indian Railways, such as multi-modal logistics parks, non-conventional sources of energy including renewable energy for railway network, and financing public-private partnership opportunities within the railways, which includes re-financing. The company recently started diversifying its lending to include a variety of projects as it saw a slowdown in growth of the railways business.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Tanima Banerjee

 

 

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