NEW DELHI (Reuters) – The Indian government is considering selling some of its stake in the state-owned Indian Railway Finance Corp (IRFC) as it aims to meet its divestment targets for the year, two government officials told Reuters on Wednesday.
The government owns a little over 86% of the Indian Railways’ funding arm.
“The stake sale would take place soon,” a government official said, adding that while the government is yet to decide the exact quantum of sale, it will aim to sell up to 11% in multiple tranches.
Last month, the government sold a more-than-5% stake in another state-run railways company, Rail Vikas Nigam, raising 13.66 billion rupees ($164.34 million).
So far in fiscal 2024, it has raised 56 billion rupees against a target of 510 billion rupees.
The Ministry of Finance did not immediately respond to a Reuters request for comment.
The sale would also have the added advantage of the government adhering to the regulator-mandated minimum public shareholding norms, which requires that public companies maintain at least 25% public shareholding.
While state-run firms have greater leeway in this regard, the government intends to bring down its shareholding in line with the norms.
Shares of IRFC have gained 58% over the last four weeks. The stock was trading at 51.55 rupees per share at 01.42 p.m. IST on Wednesday, up 1%.
($1 = 83.1202 Indian rupees)
(Reporting by Nikunj Ohri; Editing by Janane Venkatraman)