The Indian Railway Finance Corporation (IRFC) Offer for Sale (OFS) opened on June 24, 2026 with a floor price of ₹91 per share — and was already 1.86x oversubscribed on Day 1. The Government exercised the green shoe option — meaning the full planned 2% stake is being sold. Retail investors can bid on June 25 (today). Here is everything you need to know.
📋 IRFC OFS — Key Details
| Parameter | Details |
|---|---|
| Company | Indian Railway Finance Corporation Limited (IRFC) |
| OFS Type | Government divestment (stake sale) |
| Floor Price | ₹91 per share |
| Day 1 (June 24) | Non-retail (institutions, HNIs) — 1.86x oversubscribed |
| Day 2 (June 25) | Retail investors — bid today! |
| Green Shoe Option | Exercised — full 2% stake sale confirmed |
| Stake Being Sold | ~2% of IRFC equity |
| FY27 Divestment Count | 6th divestment — ₹16,480 crore raised so far in FY27 |
| IRFC Market Cap | ~₹1.2 lakh crore at ₹91 |
🏛️ What Is IRFC?
IRFC (Indian Railway Finance Corporation) is the financing arm of Indian Railways — a Government of India enterprise that:
- Raises funds from debt markets (bonds, external borrowings) at low rates
- Lends those funds to Indian Railways (Ministry of Railways) for purchasing rolling stock (trains, wagons), building infrastructure
- Earns a spread (the difference between borrowing cost and lending rate to Railways)
- Zero credit risk — Indian Railways is 100% sovereign-guaranteed borrower
- Has never had an NPA (Non-Performing Asset) in its history
📊 IRFC Fundamentals
| Metric | FY26 | Note |
|---|---|---|
| Revenue | ~₹26,000+ crore | Lease income from Railways |
| Profit After Tax | ~₹6,400 crore | Steady growth |
| Dividend Yield (at ₹91) | ~1.5–2% | Annual dividend |
| P/E Ratio at ₹91 | ~18-19x | Reasonable for NBFC |
| Book Value | ~₹45-50/share | Significant premium to book |
| Debt/Equity | Very high (by design) | It is a borrowing entity |
| Government Stake | ~72% (post-OFS) | Strong sovereign backing |
📉 Why Did IRFC Fall 5.4% Yesterday?
IRFC fell 5.4% on June 23 when news of the OFS with a floor price of ₹91 emerged. This is normal OFS behaviour — the floor price acts as a ceiling in the near term because:
- Institutional investors wait for the OFS to buy at ₹91 rather than pay higher market price
- This creates selling pressure on the exchange until the OFS completes
- Post-OFS, once supply is absorbed, IRFC should recover
✅ How to Apply for IRFC OFS — June 25 (Today)
- Login to your broker: Zerodha Kite, Groww, Angel One, HDFC Securities, ICICI Direct
- Go to OFS section in your broker’s app (usually under IPO/OFS)
- Enter bid: Minimum 1 share at ₹91 or higher (retail can bid at floor)
- UPI/ASBA authorisation: Complete payment authorisation
- Allotment: June 27, 2026 (estimated)
Note: Retail investors get a 5% discount to the cut-off price in OFS — so if cut-off is ₹91, retail pays ₹86.45.
🤔 Should You Bid for IRFC OFS?
Bull Case — Yes
- Sovereign risk — zero credit risk, Indian Railways is backed by Government of India
- 5% retail discount to cut-off price — instant gain if stock recovers
- 1.86x oversubscription on Day 1 signals strong institutional interest — positive signal
- India’s railway capex plan is massive (₹3.1 lakh crore in FY26 budget) — IRFC benefits directly
- Steady dividend income — IRFC has paid consistent dividends
Bear Case — Risk Factors
- IRFC already trades at significant premium to book value (~2x book at ₹91)
- Interest rate sensitivity — IRFC’s spreads compress if borrowing costs rise
- Government overhang — repeated dilution through OFS reduces upside
- Stock fell from ₹230 (peak 2024) to ₹91 — long-term holders are in deep loss
- Not a high-growth stock — earnings grow at ~8–12% annually, same as borrowing rate
EarnFree Verdict
Apply for short-term (listing gains): 5% retail discount + strong oversubscription = potential 5–10% gain on allotment. Stock should recover from ₹91 OFS price once supply pressure clears.
Long-term hold: Only if you want a low-risk bond-like equity — not for growth. At ₹91, IRFC is reasonably valued but not cheap.
Disclaimer: For educational purposes only. Not SEBI-registered investment advice. OFS applications involve market risk. Consult a qualified financial advisor.
Related posts:
