IRFC Shares Fall 4% as Government OFS Opens for Subscription; Key Details for Investors

IRFC Shares Fall 4% as Government OFS Opens for Subscription; Key Details for Investors​

Shares of Indian Railways Finance Corporation Ltd. declined up to 4% on Wednesday, February 25, as the Government’s Offer For Sale opened for non retail investors, triggering fresh supply pressure in the counter.

The stock was trading 3.8% lower at ₹105.33 during the session, reflecting investor response to the divestment plan.

Government to Divest 2% Stake with Green Shoe Option​

The Government plans to offload a 2% stake in IRFC through the Offer For Sale, with an additional 2% green shoe option. The divestment details were outlined by the Department of Investment and Public Asset Management.

The floor price for the OFS has been fixed at ₹104 per share, representing a 4.5% discount to Tuesday’s closing price.

At the end of the December quarter, the Government held an 86.36% stake in IRFC. If the green shoe option is fully exercised, the divestment could generate ₹5,436 crore based on the OFS floor price.

Excess Stake Above Public Shareholding Norms​

The Government’s current holding exceeds the minimum public shareholding norms by 11.36%. This surplus stake is valued at over ₹14,000 crore at prevailing market prices.

The OFS is part of efforts to align shareholding with regulatory requirements.

Retail Participation Opens Thursday​

Retail investors can place bids in the OFS on Thursday.

As per the December quarter shareholding pattern, IRFC has approximately 51.2 lakh retail shareholders, defined as those holding authorised share capital of up to ₹2 lakh. Collectively, they own a 9.5% stake in the company.

IRFC Stock Performance Since IPO​

IRFC was among the first public issues of 2021 and listed at its issue price of ₹26 per share.

The stock delivered limited returns during its initial two years. However, from March 2023 onwards, it witnessed a sharp rally that extended into 2024. Shares touched a record high of ₹229 in July 2024 before entering a correction phase.

As of Tuesday’s close, the stock remains 52% below its record high. Despite the correction, it continues to trade nearly four times above its IPO price.

Year to Date Movement​

In the first two months of the current year, IRFC shares have declined 17%, adding to the recent volatility triggered by the OFS announcement.

Investors are closely monitoring subscription trends and pricing dynamics as the government’s stake sale progresses.