Indian Railway Finance Corporation shares fell over 4% to a fresh 52-week low after the Government of India announced a 4% stake sale via an Offer for Sale. The move triggered immediate market reaction, with IRFC stock slipping below key moving averages and extending its recent downtrend.
This article provides a complete breakdown of the IRFC OFS 2026, floor price, timeline, government stake dilution, financial performance, and what it means for retail and institutional investors.
Table of Contents:
- Overview of Indian Railway Finance Corporation
- IRFC OFS 2026: Offer for Sale Structure and Key Details
- Why Did IRFC Share Price Fall 4% After OFS
- IRFC Q3 FY26 Results: Financial Performance Analysis
- Why Is the Government Selling IRFC Stake?
- IRFC Long-Term Investment Outlook After OFS
- Strategic View: Is IRFC Stock a Good Investment in 2026?
- FAQs on IRFC OFS 2026
Indian Railway Finance Corporation (IRFC) is a Government of India owned NBFC that acts as the dedicated financing arm of the Ministry of Railways. It raises funds from domestic and global markets and leases rolling stock assets to Indian Railways under a cost-plus model.
Key characteristics:
- Government-backed railway NBFC
- Zero NPA business model
- Long-term leasing structure
- Stable margins
- High AUM growth
IRFC is classified as a Mini Ratna public sector undertaking.
The Government of India currently holds 86.36% stake in IRFC. Under the February 2026 OFS, it plans to dilute up to 4%.
IRFC OFS Key Highlights
| Feature |
Details |
| Total Stake on Offer |
Up to 4% |
| Base Offer |
2% |
| Green Shoe Option |
Additional 2% |
| Total Shares |
Approx 52.27 crore shares |
| Floor Price |
₹104 per share |
| Discount to Market Price |
Approx 5% vs ₹109.44 close |
| Expected Proceeds |
Around ₹5,436 crore |
| Promoter Holding Post OFS |
Approx 82.36% |
IRFC OFS Timeline
-
25 February 2026: Open for Non-Retail Investors, QIBs and institutions
-
26 February 2026: Open for Retail Investors and eligible employees
This structure follows the standard Government OFS mechanism used in public sector disinvestment.
IRFC share price decline after OFS announcement is a typical market reaction. Two key factors explain the fall:
1. Arbitrage Opportunity Due to Floor Price
- Floor price set at ₹104
- Previous closing price at ₹109.44
- Approx 5% discount
Investors often sell in the secondary market and rebuy via OFS at a lower price, creating short-term selling pressure.
2. Supply Overhang Effect
- Up to 52.27 crore shares are entering the market
- Immediate increase in tradable supply
- Temporary imbalance between demand and supply
Such pressure is usually short-term and stabilises once institutional absorption occurs.
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To assess how the OFS announcement has reflected in market action, check the latest IRFC share price, price chart, and key valuation ratios on the BSE.
Despite the OFS-triggered volatility, IRFC’s operational performance remains strong.
Key Financial Metrics Q3 FY26
| Metric |
Q3 FY26 |
| Net Profit |
₹1,802 crore |
| YoY Growth |
10.5% |
| Revenue |
₹6,661 crore |
| AUM |
₹4.75 lakh crore |
| NPA Ratio |
0% |
| Sanctions Achieved |
₹60,000 crore |
Highlights
- Record net profit of ₹1,802 crore
- 10.5% year-on-year profit growth
- AUM reached all time high of ₹4.75 lakh crore
- Achieved full-year sanction guidance within 9 months
- Maintained 0% NPA due to sovereign backed leasing model
Revenue decline was marginal and attributed to a one-year moratorium extension on a project lease agreement.
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The divestment is primarily driven by SEBI’s Minimum Public Shareholding rule.
SEBI MPS Rule
- Listed companies must maintain at least 25% public shareholding
- Promoter holding must be capped at 75%
Even after this 4% dilution, the government stake will remain above 82%. This indicates that:
- Further stake sales are likely in the future
- Additional OFS or follow-on offers may occur
- A gradual divestment strategy is expected
This is regulatory compliance-driven, not performance-driven.
Want to understand how railway-focused PSU stocks are behaving as a group amid divestment activity? Track sector trends through the Nifty India Railways PSU index.
IRFC has delivered more than 320% returns over a 5-year period, qualifying it as a multibagger PSU stock.
For Long-Term Investors
IRFC may be suitable for:
- Investors seeking stable government-backed NBFC exposure
- Long-term infrastructure financing theme investors
- Dividend yield-focused portfolios
- PSU stock allocation strategies
The OFS provides an entry opportunity at a regulated floor price.
For Short-Term Traders
Short-term considerations:
- Volatility is likely until the supply is absorbed
- Trading below 50 day and 200-day moving averages
- Sentiment-driven swings are possible
Investors must track:
- Institutional subscription levels
- Post OFS demand trend
- Technical breakout confirmation
IRFC’s investment case rests on:
- Zero NPA asset quality
- Predictable earnings model
- Government-backed business
- Strong AUM growth
- Railway infrastructure expansion theme
Risks include:
- Interest rate environment
- Policy changes
- Continued supply through future stake sales
- Limited pricing flexibility due to cost plus structure
For long term capital allocation, IRFC remains structurally stable, though near term volatility may persist.
1. What is the floor price of IRFC OFS 2026?
The floor price is ₹104 per share, approximately 5% below the previous closing price.
2. How much stake is the Government selling in IRFC?
Up to 4% stake, including a 2% base offer and 2% green shoe option.
3. Why did IRFC shares fall after OFS?
The fall was due to arbitrage opportunities and increased share supply in the market.
4. What is IRFC’s NPA ratio?
IRFC maintains a 0% NPA ratio due to its sovereign-backed cost-plus leasing model.
5. What is IRFC’s AUM as of December 2025?
Assets under management stood at ₹4.75 lakh crore.
6. Is IRFC a long-term investment stock?
For long term investors seeking stable PSU and infrastructure exposure, IRFC may offer steady returns, though short term volatility can occur.
7. Will there be more stake sales in IRFC?
Yes, further stake sales are likely as the government needs to reduce promoter holding below 75% to comply with SEBI norms.