Oversubscription Option Exercised: IRFC OFS Reduced

IRFC OFS Update: Government Declines Greenshoe Option; Shares to Remain in Focus on February 26​

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

Government Restricts IRFC OFS to Base Offer of 2%​

In an exchange filing on Wednesday, IRFC stated that the government, which is also the promoter of the company, will not exercise the option to sell an additional 2 percent stake. The decision follows an undersubscription of 1.18 crore equity shares on Wednesday, when the OFS opened for 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 share capital.

Initially, the government had planned to divest 2 percent stake with a greenshoe option of another 2 percent. If fully subscribed at the floor price, the additional stake sale could have fetched over ₹5,400 crore.

Retail Portion Opens on February 26​

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

The portion allocated to non retail investors was subscribed 95 percent on Wednesday, according to BSE data.

Government Stake and Minimum Public Shareholding​

As of December 31, the government held 86.36 percent stake in IRFC, which is 11.36 percent above the minimum public shareholding requirement of 75 percent.

At the OFS floor price, the excess stake was valued at over ₹14,000 crore, highlighting the scale of potential divestment over time.

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 range between ₹80,000 crore and ₹90,000 crore.

The company has already surpassed its full year guidance on both disbursements and sanctions.

Dubey also noted that the financial benefits from IRFC’s diversification beyond railway projects into metro and port financing are expected to reflect from the first quarter of financial year 2027.

IRFC Share Price Performance​

IRFC shares ended 4.6 percent lower on Wednesday at ₹104.49, almost in line with the OFS floor price set by the government.

The stock remains under pressure and is down more than 50 percent from its record high of ₹229 reached in July 2024.

With the greenshoe option now off the table and the retail portion opening on Thursday, market participants will closely track subscription levels and price action in IRFC shares.