Indian Railway Finance Corp (IRFC) share price fell as much as 5.15% to ₹93.59 apiece in Wednesday’s trading session as the offer-for-sale (OFS) has opened for non-retail investors today.
The railway stock opened at ₹94 per share today, as compared to previous close of ₹98.67 on Tuesday.
IRFC OFS details
Under the Offer for Sale (OFS), the Centre intends to divest a 1% stake in the company, equivalent to 13.06 crore shares, with the provision to sell an additional 1% stake—another 13.06 crore shares—through the greenshoe option.
IRFC has notified stock exchanges that the OFS floor price has been set at ₹91 per share, reflecting a 7.5% discount to the stock’s previous closing price. The issue will be available to retail investors on Thursday.
As per exchange data, the government held an 84.65% stake in IRFC at the end of the March quarter, while retail investors owned 9.68%.
The OFS is likely to enhance the stock’s free float and liquidity, while providing investors with another opportunity to gain exposure to one of India’s largest railway financing firms.
The proposed stake sale forms part of the Centre’s broader disinvestment strategy and comes after recent OFSs in Coal India, Central Bank of India, NLC India, NHPC, and GIC. Notably, the government has exercised the greenshoe option in all OFSs conducted so far this year, supported by robust investor interest.
Experts view on IRFC OFS
According to Harshal Dasani, Business Head – INVasset PMS, IRFC OFS is not a simple discount trade; it is a test of whether investors are willing to buy a PSU financier after a large thematic rerating.
Dasani further highlighted that the core business remains structurally important because IRFC sits at the centre of railway capex financing, with predictable asset quality and a sovereign-linked operating model.
“That gives comfort on balance-sheet risk. The discomfort is valuation. Railway PSUs have already priced in a large part of the capex optimism, so the margin for error is thinner than it was during the early phase of the rally,” Dasani said.
Meanwhile, Mahesh M Ojha, VP Research & Business Development at Kantilal Chhaganlal Securities, believes that the floor price of the IRFC OFS appears attractive from the current market perspective.
“However, the final cut-off price determined by non-retail investors will be a key factor for retail participants to monitor. Given the prevailing market conditions and the discount offered at the floor price, retail investors may consider participating in the issue, while keeping an eye on institutional demand and the eventual cut-off price,” Ojha said.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
