IRFC Share Price Declines Over 4% After Govt to Divest Up to 4% Stake via OFS

Offer Size and Green Shoe Option

Under the base offer, the government will offload 26,13,70,120 equity shares, representing 2% of IRFC’s total issued and paid-up equity share capital. Additionally, an oversubscription or green shoe option allows for the sale of another 26,13,70,120 shares, equivalent to an additional 2% stake. If fully exercised, the total divestment will amount to 4% of the company’s equity.

At the floor price of ₹104 per share, the government stands to raise approximately ₹5,430–₹5,436 crore if the entire 4% stake is sold. The floor price reflects a discount of about 5% to the previous closing price of ₹109.40 to ₹109.44 on the NSE. Following the stake sale, the government’s holding in IRFC will decline from 86.36% to 82.36%.

Bidding Timeline and Participation Structure

The OFS will be conducted through a separate window on both BSE and NSE, with NSE serving as the designated stock exchange. Goldman Sachs (India) Securities Private Limited has been appointed as the sole broker for the transaction.

On T Day (February 25, 2026), bidding will be open exclusively to non-retail investors between 9:15 a.m. and 3:30 p.m. On T+1 Day (February 26, 2026), retail investors and eligible IRFC employees can participate. Non-retail investors who choose to carry forward unallotted bids may revise them on the second day.

Reservation for Investors and Employees

The offer structure ensures broader participation. Ten percent of the offer shares are reserved for retail investors whose aggregate bid value does not exceed ₹2,00,000. Within the non-retail category, a minimum of 25% of the offer shares is reserved for mutual funds and insurance companies. Additionally, up to 25,000 equity shares, representing approximately 0.0002% of the company’s equity, are reserved for eligible employees, who may apply for shares worth up to ₹5,00,000. Notably, no discount is being offered to retail investors or employees.

IRFC Q3 FY26 Financial Performance 

Despite the recent price weakness, IRFC has reported strong financial results. For the quarter ended December 2025, the company posted its highest-ever quarterly profit for the third consecutive quarter. Profit after tax (PAT) rose 10.52% year-on-year to ₹1,802 crore, marking a record high.

Net interest margins improved by over 8% year-on-year during the quarter, supported by value-accretive disbursements across diversified segments and disciplined liability management. Total income for the December 2025 quarter stood at ₹6,719 crore, while income for the nine-month period reached ₹20,009 crore.

IRFC, a Navratna public sector enterprise under the administrative control of the Ministry of Railways, serves as the dedicated financing arm of Indian Railways. The company mobilises funds from domestic and overseas markets to meet the predominant portion of extra-budgetary resource requirements of Indian Railways.

The OFS, priced at a discount to the prevailing market rate, is expected to attract institutional and retail participation while enabling the government to move closer to regulatory public shareholding norms.

IRFC Share Price Declined by Over 4% on Wednesday

IRFC shares reacted negatively to the announcement. The stock fell as much as 4.2% to ₹104.82 on the NSE, even as the benchmark Nifty 50 gained around 0.7%. As of 11:37 am, the stock traded at ₹105.06, down 4%.  NSE volumes stood at 288 lakh shares, nearly twice the 20-day average traded volume, with total turnover of approximately ₹303.95 crore.

Ahead of the announcement, the stock had closed at ₹109.40 on February 24, 2026, down ₹2.45 or 2.19% for the day.

IRFC has underperformed the broader market, declining 14.75% over the past one year, compared to an 13.49% gain in the Nifty 50 during the same period. The stock is currently trading below its 50-day and 200-day simple moving averages, indicating technical weakness.