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.