IRFC OFS 2026: 4% stake sale, ₹5,430 crore target

OFS opens as government starts stake dilution

Indian Railway Finance Corporation (IRFC) shares traded sharply lower on Wednesday, February 25, as the government opened an Offer for Sale (OFS) to divest up to 4% stake. The floor price for the OFS has been set at ₹104 per equity share, according to IRFC’s regulatory filing. At this floor price, the Centre is expected to mobilise about ₹5,430 crore if the full 4% is sold. The sale is being carried out by the President of India acting through the Ministry of Railways. The OFS introduces a near-term increase in tradable supply in a stock where the government remains the dominant shareholder.

Floor price, discount, and how the offer is structured

The OFS comprises a 2% base offer and an additional 2% green shoe option. The base portion involves the sale of 26.13 crore equity shares, with an option to sell another 26.13 crore shares under the oversubscription window. Taken together, the sale can reach 52.27 crore shares, representing 4% of IRFC’s paid-up equity.

The floor price of ₹104 signals a discount of about 5% to the prior close cited in reports, with IRFC’s previous closing price referenced around ₹109.40 to ₹109.44. Such pricing is typical in OFS transactions and can influence near-term trading as investors recalibrate around the offer price.

Who can bid, and the two-day schedule

The bidding process is scheduled over two days. The OFS opens on February 25 for non-retail investors. Retail investors can place bids on February 26. DIPAM Secretary Arunish Chawla said in a post on X that the government is disinvesting 2% equity with an additional 2% green shoe option.

IRFC also said it is offering 25,000 equity shares to eligible employees. The OFS is being conducted through a separate window provided by the stock exchanges.

Share price reaction: stock hits multi-month low

IRFC’s stock fell more than 4% during Wednesday’s session as the OFS opened. On the NSE, the share price declined as much as 4.22% to an intraday low of ₹104.82, which was described as the lowest level since January 11, 2024. Around 10:52 AM, the stock was trading about 3.9% lower at ₹104.93, while the Nifty 50 index was up 0.77%.

On the BSE, IRFC closed at ₹109.40, down 2.19% in the session referenced. Separate intraday data cited the stock trading around ₹105 levels after opening near ₹105.99. Market cap was reported around ₹135,000 crore to ₹137,000 crore during the decline.

Volumes and positioning going into the OFS

Trading activity picked up as the offer opened. About 23.3 million shares were traded on the NSE early in the session, according to the figures provided. Another report noted that volumes surged to nearly twice the 20-day average as investors adjusted to the additional supply.

The stock’s recent performance has also been in focus. Over the last 12 months, IRFC was reported to have declined about 15% versus a 13.7% rise in the Nifty 50. Another one-year comparison cited a roughly 12% decline in IRFC against an 11% gain in the Nifty. The stock was also reported to be nearly 30% below its 52-week high of ₹148.90 and about 52% down from an all-time peak near ₹218 in July 2024.

Why the government is selling: public shareholding norms

The stated objective of the OFS, as described in one of the exchange-filing summaries shared in the text, is to achieve minimum public shareholding compliance under Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, read with Regulation 38 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The government currently holds 86.36% in IRFC. If the full 4% is sold, the stake will reduce to 82.36%.

This makes the transaction primarily regulatory in nature rather than an operating update on IRFC’s business, which centres on raising financial resources for Indian Railways through capital markets and other borrowings.

Key facts at a glance

Shareholding snapshot mentioned in the reports

Investor ownership data cited in the text shows a broad retail base in IRFC. As of December 31, 2025, nearly 51.25 lakh retail investors held 10.57% stake. LIC of India held 1.10%, while foreign portfolio investors (FPIs) owned less than 1%.

This context matters because OFS events can change near-term supply-demand dynamics across investor categories, especially when the promoter holding is high and the market is absorbing a block of shares.

Market impact and what investors are watching

The immediate market impact was the stock’s sharp decline toward the OFS floor price and elevated trading activity. The discount implied by the floor price versus the prior close added to the pressure, while the upcoming retail bidding day can also influence short-term positioning.

Investors are also tracking how much of the green shoe option gets exercised, since that determines whether the sale remains at 2% or extends to the full 4%. Another key variable is final clearing price behaviour relative to the ₹104 floor and how quickly secondary market liquidity normalises after the transaction window.

Conclusion

IRFC’s OFS opened with a ₹104 floor price as the government moved to dilute up to 4% stake, targeting roughly ₹5,430 crore in proceeds. The stock fell over 4% during the session, with prices trading close to the offer floor. The next milestone is the retail bidding window on February 26, along with clarity on whether the green shoe portion is fully exercised.