Indian Railway Finance Corporation (IRFC) is back in the spotlight, but this time it is not because of a stock market rally. The government has launched an Offer for Sale (OFS) to offload up to a 2 per cent stake in the railway financing company, a move that could fetch more than Rs 2,300 crore. The timing is notable.
Over the past two years, IRFC has emerged as one of the most talked-about PSU stocks among retail investors.
With the company attracting strong market interest, the Centre is now looking to unlock value from part of its holding through another round of disinvestment.
FROM PSU STAR TO STAKE SALE
The government currently holds a majority stake in IRFC and plans to sell 1 per cent equity, with an additional 1% available through a greenshoe option if demand remains strong. The OFS opened first for non-retail investors, while retail investors can participate in the next phase.
At a floor price of Rs 91 per share, the transaction involves more than 26 crore shares and could raise over Rs 2,300 crore for the exchequer.
The floor price is set at a discount to the prevailing market price, a common feature in government stake sales.
DEMAND REMAINS STRONG
Despite concerns about near-term stock performance, institutional investors have shown strong interest in the OFS.
The non-retail portion was oversubscribed, prompting the government to exercise the greenshoe option for additional shares.
That demand suggests investors continue to see value in the railway financier even as the government trims its ownership.
IRFC is not just another PSU. It became one of the most closely watched beneficiaries of the broader public sector stock rally and the growing investor focus on railway-linked companies.
The company plays a key role in raising funds for Indian Railways and remains a strategic government-owned financier.
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The latest OFS also forms part of the government’s wider disinvestment programme, which has already generated thousands of crores through stake sales in multiple public sector companies this financial year.
There is a familiar pattern in government disinvestment. As investor appetite for a PSU strengthens, the government gets an opportunity to monetise a portion of its holding. IRFC’s latest stake sale fits neatly into that playbook.
For investors, the question is whether the company can continue delivering the growth story that made it a market favourite in the first place. For the government, the immediate goal is simpler: convert strong investor demand into fresh disinvestment proceeds.
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