IRFC OFS Opens at Rs 91 Floor Price

The Indian government has opened an offer for sale in Indian Railway Finance Corporation (IRFC) for non-retail investors today, June 29, 2026, with a floor price set at Rs 91 per share. Retail investors get their window the following day. The government is selling a 1% stake, with a greenshoe option that allows it to offload an additional 1% if demand is strong enough.

An offer for sale, or OFS, is a stock exchange mechanism that lets existing shareholders, in this case the government, sell shares directly to the market without the company issuing new stock. It does not raise money for IRFC itself. The proceeds go to the government, which is trimming its holding in the state-run railway financier.

The Rs 91 floor price is the minimum at which bids will be accepted. Investors can bid at or above this level, and shares are typically allotted starting from the highest bid downward until the offered quantity is exhausted. The greenshoe option means the total stake sold could reach 2% if non-retail demand warrants it, giving the government flexibility to maximise proceeds without a separate transaction.

Where the stock stands

IRFC shares are trading roughly 60% below their 2024 record high, which frames the Rs 91 floor price in sharp relief. The stock's decline from its peak reflects a broader correction in public sector undertaking shares that ran hard in 2023 and early 2024 on infrastructure and railway investment themes. At current levels, the OFS price offers the government a chance to divest without waiting for a full recovery, while buyers who believe in the long-term railway financing story get a discounted entry relative to peak valuations.

On the earnings front, IRFC reported steady results for the March quarter. The company's business model is straightforward: it borrows from the market, lends exclusively to Indian Railways at a small spread, and collects repayments backed by the sovereign. That structure keeps credit risk minimal but also limits upside, since revenue growth tracks the pace of railway capital expenditure rather than any commercial lending cycle.

What investors should watch

For existing shareholders, the OFS does not change the company's fundamentals. It is a secondary transaction. However, a fresh supply of shares in the market, up to 2% of equity, can put short-term pressure on the stock price, particularly if the floor price of Rs 91 is close to or above the prevailing market price at the time of the sale. Investors should check where the stock is trading relative to Rs 91 before deciding whether to participate or hold.

The greenshoe mechanism is worth noting. If non-retail demand on day one is strong, the government can exercise the option and sell the additional 1%, effectively doubling the supply. This is common in large OFS transactions and signals the government's intent to maximise divestment proceeds when market appetite allows.

Retail investors, defined as those bidding up to Rs 2 lakh, get a reserved portion and can submit bids the day after non-retail bidding closes. They also typically get a small discount to the final price discovered in the non-retail round, which makes the retail window worth watching for smaller investors.

More broadly, this OFS fits into the government's ongoing strategy of paring stakes in profitable public sector companies to meet divestment targets. IRFC, with its stable earnings backed by railway repayments, is a relatively low-risk asset to sell into the market. The question for investors is whether Rs 91 represents fair value given the 60% gap from the 2024 high and the company's predictable but low-growth earnings profile.