Indian Railway Finance Corporation (IRFC) is facing a fresh supply overhang as the Government of India plans to sell up to 4% stake via Offer for Sale (OFS), with a floor price of ₹104 per share, opening February 25, 2026 for non‑retail and February 26, 2026 for retail investors.

IRFC OFS – Key Details

• Company: Indian Railway Finance Corporation Ltd (IRFC) – dedicated financing arm of Indian Railways.

• Seller / Promoter: President of India, acting through the Ministry of Railways.
• Purpose:
  • Stake dilution to move towards SEBI’s minimum public shareholding norm (75% cap on govt holding).
  • Part of the FY26 disinvestment programme.

Offer Size & Structure

• Base offer:

  • Up to 26,13,70,120 equity shares (~2% of paid‑up capital).
• Oversubscription (Green Shoe) option:
  • Additional 26,13,70,120 shares (another 2%).investywise+3
• Total stake on offer:
  • Up to 4% of IRFC equity if green shoe is fully exercised.

Dates & Timing

• T Day – Non‑retail (QIB, HNI, prop desks):

  • February 25, 2026, 9:15 a.m. – 3:30 p.m. (normal market hours).
• T+1 Day – Retail & Employees + carry‑forward non‑retail:
  • February 26, 2026, 9:15 a.m. – 3:30 p.m.

Pricing & Reservation

• Floor price: ₹104 per share – bids cannot be placed below this.

• Retail / employee discount: No discount announced (i.e., same floor price for all categories).
• Allocation:
  • Non‑retail: Price‑priority at or above cut‑off; at least 25% reserved for Mutual Funds & Insurance Companies (subject to valid bids).
  • Retail: 10% of offer reserved; allocation at cut‑off price.
  • Employees: Up to 25,000 shares, max ₹2 lakh per employee, bids only at cut‑off.
• Single‑bidder cap: No non‑MF/insurance bidder can get more than 25% of OFS shares.

What This OFS Means for Investors

• The Centre currently holds ~86% in IRFC, much above the 75% cap; the OFS is a step towards increasing public float in line with SEBI norms.

• OFS is supply from the promoter, not fresh capital – so no EPS dilution, but near‑term price pressure possible due to extra shares hitting the market.
• Typically, OFS floor prices are set at a discount or near market price to attract institutional demand; the ₹104 floor will act as a short‑term reference level for traders.

Strengths – IRFC & This OFS

• Backed by Government of India, strategic PSU financing arm of Indian Railways.
• Monopoly‑like franchise in railway project financing with predictable business model.
• OFS increases free float and liquidity, potentially aiding index inclusion/weights.
• No dilution of company capital; only promoter stake trimming for MPS compliance.
• Floor price often closer to “value zone”, offering entry to long‑term PSU/infra investors.

Risks & Things to Watch

• Overhang of 2–4% stake sale can pressure share price in the near term.
• No retail discount; upside purely depends on post‑OFS demand and market sentiment.
• OFS route signals continuing government disinvestment, further tranches possible.
• PSU and rate‑sensitive stock; valuation impacted by bond yields and policy rates.
• If bids are weak at floor price, OFS can be partially filled or cancelled, creating volatility.

FAQs

1. What is an OFS in the context of IRFC?
An Offer for Sale (OFS) is a mechanism where existing shareholders (here, Government of India) sell part of their stake via the stock exchanges. There is no new share issue; only ownership changes hands.

2. How much stake is the government selling in IRFC?
The base offer is 2% of IRFC’s paid‑up equity (~26.14 crore shares), with an option to sell another 2% if demand is strong, taking the total to up to 4%.

3. What are the IRFC OFS dates for non‑retail and retail investors?

• Non‑retail (QIB / HNI / prop): 25 February 2026 (T Day).
• Retail & employees: 26 February 2026 (T+1 Day).

4. What is the floor price for the IRFC OFS?
The government has set a floor price of ₹104 per share, meaning bids cannot be placed below this level.hindi.

5. Is there any discount for retail or employees?
No specific retail or employee discount has been announced; all categories bid at or above the same floor/cut‑off price.

6. How can a retail investor participate in the IRFC OFS?
On T+1 day (26 Feb), eligible retail investors can place bids through their broker’s OFS window on NSE/BSE, selecting “cut‑off” or a specific price ≥ floor price, funded through existing cash/limits in the trading account.

7. Will the IRFC OFS impact the company’s fundamentals?
The OFS does not dilute EPS or net worth as no new shares are issued. However, improved public shareholding and liquidity can influence long‑term valuation, while short‑term price can be volatile due to extra supply.

8. Is the IRFC OFS good for long‑term investors?
For investors positive on railway capex, PSU reforms and IRFC’s annuity‑style business, the OFS floor can act as a reference entry zone. But it remains subject to PSU, interest‑rate and policy risk; this is not personalised advice.

9. What happens if the OFS is undersubscribed at the floor price?
The seller can reduce the size or cancel the OFS if sufficient demand is not received at or above the floor price, which may cause short‑term volatility in the stock.

10. Does the OFS guarantee listing gains or upside?
No. An OFS is secondary sale, not an IPO. Post‑OFS price will depend on overall market conditions, PSU sentiment and IRFC’s financial performance, not just on the floor price.