Shares of Indian Railway Finance Corporation (IRFC) declined more than 4% in trade, touching their 52-week low after the Government of India announced plans to divest up to 4% equity through an Offer for Sale (OFS).

The stock, which had ended the previous session near the ₹109 mark, slipped to the ₹104–105 range during the day after the floor price for the OFS was set at ₹104 per share — a discount to the prevailing market rate. The fall reflects investor reaction to the increased supply of shares and the pricing of the stake sale.

₹5,430 Crore OFS to Reduce Govt Holding

The Centre is offering a base stake of 2%, with an additional 2% green shoe option. In total, up to 26.13 crore shares are being sold. At the fixed floor price of ₹104 per share, the government stands to raise nearly ₹5,430 crore if the entire 4% stake is subscribed.

The government currently holds 86.36% in IRFC. Following the sale, its shareholding would fall to around 82.36%, assuming full subscription including the green shoe option. The OFS opened first for institutional investors, with retail participation scheduled subsequently.

Stake sales in public sector undertakings typically create short-term pressure due to equity dilution and higher floating stock, particularly when priced below market levels.

Earnings Stable Despite Market Pressure

Despite the sharp correction in the share price, IRFC’s financial metrics remain steady. In its latest reported quarter, the company posted a net profit of over ₹1,800 crore, marking year-on-year growth. Total income stood above ₹6,700 crore, while net worth expanded beyond ₹52,000 crore, indicating a strong capital base.

IRFC functions as the dedicated financing arm of Indian Railways, raising funds from domestic and overseas markets to support rolling stock procurement and infrastructure expansion. Its business model is largely based on stable, long-term lease arrangements with the Railways.

While the immediate impact of the OFS has pushed the stock to its lowest level in a year, market participants will closely watch subscription data, institutional demand, and price action post the offer to gauge the near-term trajectory of the counter.