Govt to Divest Up to 4% Stake in IRFC via OFS, Sets Floor Price at ₹104

The government has announced an offer for sale (OFS) to divest a portion of its stake in Indian Railway Finance Corporation (IRFC), the financing arm of Indian Railways. The move is part of the Centre’s broader disinvestment programme. The OFS will open first for non-retail investors on Wednesday, followed by retail investors on Thursday. The issue includes both a base offer and a greenshoe option.

How Is the OFS Structured?

The government will sell a 2% stake in IRFC at first, and if there is a lot of demand, they may sell another 2% as a greenshoe option.

Key details of the OFS include:

• The base offer is a 2% stake, which is equal to 261.4 million equity shares.
• Greenshoe option of an additional 2%, taking the total potential divestment to 4%.
• Floor price has been set at ₹104 per share.
• IRFC shares closed at ₹109.40 on Tuesday, down 2.19% from the previous session close.
• The floor price represents a 4.95% discount to Tuesday's closing price.

What Does This Mean for IRFC Stock?

An OFS announcement can apply short-term supply pressure on a stock, especially when it is issued at a lower price than the current market price. Investors tend to rethink their valuations of the near-term equilibrium in demand/supply because of the new shares being issued into existing trading markets.

For IRFC, the near-term price movement could remain sensitive to:

• Institutional demand in the non-retail window on Wednesday.
• Retail participation on Thursday.
• The extent to which the greenshoe option is exercised.

At the same time, increased free float can improve liquidity and broaden the shareholder base. Over time, a wider investor base can support better price discovery and inclusion in institutional portfolios.

Short-term price swings are common around an OFS, particularly when the floor price is set well below recent trading levels. That tends to invite near-term volatility.

Over the longer run, IRFC, as the sole financing arm of Indian Railways, is positioned to benefit from continued investment cycles in railway infrastructure.

Key Investor Takeaway

The IRFC OFS brings extra shares into the market at a floor price of ₹104. In the near term, this supply could act as an overhang and keep the stock from moving much. On the morning of 25 February 2026, IRFC was trading at around ₹105.17.

The market will also keep a close watch on the post-OFS shareholding structure and how it affects index weightings and institutional ownership.

Over time, a larger free float may help improve liquidity and bring in more institutional participation. For now, the question is whether buying interest at OFS levels is strong enough to absorb the extra shares without pushing the price lower.

Sources

Economic Times
Business Today