IRFC shares in focus as OFS opens for subscription today — Here's what investors should know

Shares of Indian Railways Finance Corporation Ltd. (IRFC) will be in focus on Wednesday, February 25, as its Offer For Sale (OFS), launched by the Government, will open for subscription for non-retail investors.

The government plans to divest 2% stake in the company through this Offer For Sale (OFS), along with a green shoe option to sell another 2%, according to the Department of Investment and Public Asset Management (DIPAM).

Floor price for the OFS has been fixed at ₹104 per share, which is a discount of 4.5% to Tuesday's closing price for IRFC.

Currently, the government owns 86.36% stake in IRFC at the end of the December quarter. In case the government does end up exercising the green shoe option, it could fetch them a sum of ₹5,436 crore, based on the OFS floor price.

The government's stake in IRFC is currently 11.36% higher than the minimum public shareholding (MPS) norms. That excess stake, based on the current market price, is valued at over ₹14,000 crore.

IRFC was among the first IPOs of 2021, when the stock made its debut at its issue price of ₹26 apiece. After nearly no returns for the first two years, the stock had a sharp rally after March 2023, which spilled over into 2024 as well. The stock made a  record high of ₹229 in July 2024, before entering a correction phase.

As of Tuesday's closing, the stock is down 52% from those record high levels. Despite this, the stock is still up 4x from its issue price.

Retail shareholders can bid for the OFS on Thursday. Based on the December quarter shareholding pattern, IRFC has as many as 51.2 lakh retail shareholders, or those with authorised share capital of up to ₹2 lakh, who own a 9.5% stake in the company.

Shares of IRFC ended over 1% lower on Tuesday at ₹109.9.