Shares of IRFC have plunged almost 4% as the government begins selling up to a 2% stake in Indian Railway Finance Corporation (IRFC) through an Offer for Sale (OFS), with an option to divest another 2% if demand is strong. The floor price has been set at Rs 104 per share, a 4.5% discount to Tuesday’s closing level.
The base offer comprises 26,13,70,120 equity shares, representing 2% of the company’s paid-up equity capital. If the green shoe option is exercised, the total size will increase to 4%. Retail participants and eligible employees can bid on Thursday, February 26.
The detailed terms were outlined in the government’s notice dated February 24, 2026.
Offer structure and timeline
As per the notice, bidding will take place on a separate window of BSE and NSE between 9:15 a.m. – 3:30 p.m. on both days. February 25 is reserved for non-retail bidders, while February 26 will be open to retail investors, employees, and non-retail bidders who choose to carry forward unallotted bids.
The designated stock exchange for the issue is NSE, with NSE Clearing acting as the clearing corporation. Goldman Sachs (India) Securities has been appointed as the sole broker to the seller.
The government may exercise the oversubscription option after trading hours on T day, and must intimate stock exchanges by 5 pm.
Pricing, allocation and reservation
The floor price for the offer has been fixed at Rs 104 per equity share. There is no discount for retail or employee bidders.
Allocation in the non-retail segment will be on a price priority basis at or above the floor price. A minimum of 25% of the offer shares is reserved for mutual funds and insurance companies, subject to valid bids .
10% of the offer shares will be set aside for retail bidders. Retail investors can bid at or above the floor price or opt for the cut-off price, which will be discovered in the non-retail book.
Up to 25,000 shares may also be offered to eligible employees, who can apply for shares worth up to Rs 2 lakh, and in certain cases up to Rs 5 lakh if there is under-subscription.
Conditions and safeguards
Non-institutional bidders in the non-retail category must deposit 100% of the bid value upfront. Institutional bidders may place bids without upfront payment, subject to custodian confirmation.
The seller reserves the right to withdraw the offer before it opens, in which case a cooling-off period of 10 trading days will apply before another OFS can be launched. The offer may also be cancelled if sufficient demand is not received at or above the floor price, or in the event of a settlement default.
Government holding and stock performance
As of the December quarter, the government held 86.36% in IRFC, which is 11.36% above the 75% minimum public shareholding requirement. Based on the floor price, the full 4% sale could fetch up to Rs 5,436 crore.
IRFC, which debuted on the stock exchanges in 2021 at Rs 26 per share, rallied sharply after March 2023 and touched a record Rs 229 in July 2024 before correcting. The stock is now down 52% from that peak, though it still trades nearly 4x above its issue price.
The response over the two bidding days will determine whether the government proceeds with the additional 2% stake sale.