IRFC OFS Update: Retail Investors Can Bid for ₹2,212 Crore Stake Today

The Indian Railway Finance Corporation (IRFC) shares are back in the spotlight as the government's Offer for Sale (OFS) opens for retail investors today. Following strong demand from institutional players, this disinvestment move marks a significant step in the government's ongoing strategy to offload stakes in various Public Sector Undertakings (PSUs).

Understanding the Scale of the IRFC OFS

The government is offloading nearly a 2% stake in IRFC. Initially, the plan was to sell a 1% stake (13.06 crore shares), but due to robust interest from non-retail investors, the government has decided to exercise the "greenshoe option."

DIPAM Secretary Arunish Chawla confirmed that the oversubscription option will be exercised to sell an additional 11.24 crore shares. This brings the total offer size to 24.31 crore shares, valued at more than ₹2,212 crore at the floor price of ₹91 per share. For retail investors, 2.43 crore shares are available, while 25,000 shares have been earmarked for eligible employees.

Pricing and Institutional Response

The floor price for this OFS is set at ₹91 per share, which represents a discount of approximately 2% from the stock's previous closing price of ₹92.5 on the NSE. The momentum for this sale began on Wednesday when the non-retail portion was subscribed 1.86 times, signaling strong confidence from large-scale institutional investors.

However, the market reaction to the news has been volatile. IRFC shares tumbled more than 6% on Wednesday following the opening of the OFS for non-retail investors. The stock has faced downward pressure recently, falling over 8% within the last week and down 27% so far in 2026. Despite this short-term correction, the company's long-term track record remains notable, having delivered 185% returns over three years and 272% over five years.

Financial Performance and Shareholding Structure

The OFS comes at a time when IRFC maintains a stable financial footing. For the quarter ended March 2026, the company reported a net profit of ₹1,684 crore, nearly identical to the ₹1,682 crore reported in the same period the previous year. Revenue for the quarter grew by 9% year-on-year, reaching ₹7,336 crore.

As of March 31, 2026, the central government held a dominant stake of nearly 85% in the company. Other significant stakeholders include the Life Insurance Corporation of India (LIC) with a 2.54% stake and various mutual funds holding a combined 0.27%. The retail community, consisting of nearly 50.66 lakh shareholders, collectively holds approximately 10% of the company.

Key Takeaways

  • Increased Offer Size: Due to high institutional demand, the government is exercising the greenshoe option, raising the total stake sale to 1.86% (24.31 crore shares).
  • Attractive Entry Point: The OFS is priced at a floor price of ₹91 per share, offering retail investors a slight discount compared to recent market closing prices.
  • Strategic Disinvestment: This move is part of a broader government push to liquidate stakes in major PSUs, following similar actions in companies like Coal India and NHPC.