Shares of the public sector undertaking (PSU) Indian Railway Finance Corporation (IRFC) plunged sharply over reports of the government considering a stake sale in the company. 

At 12:20, IRFC shares were trading at Rs 48.80, down 4.78% from the previous close on the National Stock Exchange (NSE). The stock touched an intraday low of Rs 48.35, nearly 5.7% lower than its last close. 

As per the Security and Exchange Board of India’s (SEBI) minimum public shareholding (MPS) norm, a listed company must have at least 25% public shareholding within five years of its listing. According to data as on June 30, the government held an 86.36% stake in the rail finance company. 

The government is considering a proposal to offload an 11.36% stake in the PSU through an offer-for-sale (OFS) in the current financial year to adhere to SEBI’s rules. A government official said, “The stake sale would take place soon,” to the news agency Reuters. The 11.36% stake is worth approximately Rs 7,600 crore at the current market price.

The shares of IRFC were listed on the exchanges in January 2021. The initial public offering (IPO) included fresh shares from the company and a dilution of the government’s stake by 4.55%.