IRFC shares hit 5% lower circuit as govt launches OFS to sell up to 2% stake

Shares of Indian Railway Finance Corporation (IRFC) fell sharply on Wednesday and were locked in the 5% lower circuit after the Government of India launched an offer for sale (OFS) to divest up to 2% stake in the railway financing public sector undertaking.

The railway PSU stock dropped by as much as 4.95% to hit its lower circuit limit of ₹93.80 on the BSE, against its previous close of ₹98.69. At the day's low, the Navratna PSU was down nearly 34% from its 52-week high of ₹143.10 touched on July 1, 2025. The company's market capitalisation stood at around ₹1.23 lakh crore.

The government, which currently holds an 84.65% stake in IRFC, has put 1% equity on sale through the OFS route, with an additional 1% available under a greenshoe option in case of strong investor demand. The offer opened today for non-retail investors, while retail investors can place bids on Thursday.

The OFS is expected to fetch the government more than ₹2,300 crore if the entire 2% stake, including the greenshoe option, is subscribed.

The stake sale is being conducted through the stock exchange mechanism, enabling transparent price discovery while helping the government increase public shareholding in the company. IRFC, the dedicated financing arm of Indian Railways, plays a critical role in funding rolling stock acquisitions and railway infrastructure projects.

Part of FY27 disinvestment push

The IRFC OFS is the latest transaction under the government's aggressive disinvestment and asset monetisation programme for FY27.

The Centre has set a target of raising ₹80,000 crore through disinvestment and asset monetisation during the current financial year and has already mobilised over ₹16,480 crore through a series of OFS transactions in public sector companies.

Prior to IRFC, the government successfully completed stake sales in Central Bank of India, Coal India, NHPC, NLC India and General Insurance Corporation of India (GIC Re), collectively raising more than ₹16,000 crore. The bulk of these proceeds has come from stake sales in public sector enterprises, including ₹5,542 crore from Coal India, ₹4,357 crore from NHPC, ₹2,266 crore from Central Bank of India, and ₹1,224 crore from NLC India.