IRFC Shares in Focus as Government Limits OFS to Base 2% Stake Sale

IRFC Shares in Focus as Government Skips Greenshoe Option in 2% OFS​

Shares of Indian Railway Finance Corporation Ltd will remain in focus on Thursday, February 26, after the government decided not to exercise the oversubscription or greenshoe option in its ongoing Offer For Sale.

Government Limits Offer to Base 2% Stake Sale​

In an exchange filing on Wednesday, IRFC stated that the government, which is also the company’s promoter, will not exercise the option to sell an additional 2 percent stake. The decision follows an undersubscription of 1.18 crore equity shares on the first day of the OFS, which was open to non retail investors.

As a result, the total offer size will remain at the base offer of 26.13 crore equity shares, representing 2 percent of the company’s outstanding equity capital.

Out of the total offer, 3.79 crore shares, or 14.52 percent, have been reserved for retail investors. The retail portion opens for subscription on Thursday, subject to receipt of valid bids.

Non Retail Portion Subscribed 95%​

According to data available on the BSE, the non retail investor portion of the OFS was subscribed 95 percent on Wednesday.

The government had initially planned to divest 2 percent stake in IRFC, along with a greenshoe option of another 2 percent. If the greenshoe option had been fully subscribed at the floor price, the total proceeds could have exceeded ₹5,400 crore.

Stake Dilution and Public Shareholding Requirement​

As of December 31, the government held an 86.36 percent stake in IRFC, which is 11.36 percent higher than the minimum public shareholding requirement of 75 percent. The excess stake, calculated at the OFS floor price, was valued at over ₹14,000 crore.

The current OFS is part of the effort to reduce the government’s holding and align with regulatory norms.

Management Guidance on Sanctions and Diversification​

IRFC Chairman and Managing Director Manoj Kumar Dubey said that sanctions for the full financial year are expected to be in the range of ₹80,000 crore to ₹90,000 crore. He added that the company has already surpassed its full year disbursement and sanctions guidance.

Dubey also indicated that the benefits of diversifying beyond traditional railway financing into metro and port projects are expected to reflect from the first quarter of financial year 2027.

IRFC Share Price Performance​

Shares of IRFC ended 4.6 percent lower on Wednesday at ₹104.49, nearly in line with the OFS floor price. The stock remains down more than 50 percent from its record high of ₹229 touched in July 2024.

With the greenshoe option ruled out and retail bidding now underway, IRFC stock is likely to remain active in Thursday’s trade amid focus on subscription levels and pricing alignment.