PSU Stock Falls 6% After Government to Sell 2% Stake Worth ₹2,443 Cr via OFS

Synopsis: The Government of India is selling up to a 2% stake in IRFC through an OFS worth about ₹2,443 crore to increase public shareholding and compliance.

This Large-Cap Stock, engaged in financing and leasing railway assets, rolling stock, and infrastructure projects, supporting the growth and modernization of India’s railway network, is crashed 5.81 percent after the government sells a stake worth Rs. 1,290 Cr through an offer for sale.

With a market capitalization of Rs. 1,22,125.19 crores, the share of Indian Railway Finance Corporation Limited has reached an intraday low of Rs. 92.96 per equity share, down nearly 5.81 percent from its previous day’s close price of Rs. 98.69. Since then, the stock has retreated and is currently trading at Rs. 93.45 per equity share. 

Reason Behind the Fall

The Government of India, through the Ministry of Railways, has announced an Offer for Sale (OFS) of shares in Indian Railway Finance Corporation Limited (IRFC). An OFS is a method through which a promoter or major shareholder sells shares to investors through the stock exchange. In this case, the government is reducing a part of its shareholding in IRFC to increase public participation and meet regulatory requirements regarding minimum public shareholding.

Under the OFS, the government will sell 13,06,85,060 equity shares, representing 1 percent of IRFC’s paid-up equity capital. At the current market price of Rs. 93.45 per share, the base offer is valued at approximately Rs. 1,221.55 crore. The government also has an oversubscription option to sell another 13,06,85,060 shares, taking the total offer size to 26,13,70,120 shares (2 percent stake).

The OFS will be conducted through BSE and NSE. Non-retail investors can place bids on June 24, 2026, while retail investors and eligible employees can participate on June 25, 2026. Unlike a buyback, where a company purchases its own shares from investors, this OFS involves the government selling its existing shares to the public.

Assets Under Management (AUM)

Indian Railway Finance Corporation (IRFC) remains one of the largest infrastructure financing companies in India, with Assets Under Management (AUM) of Rs. 4,84,616.77 crore in FY 2025-26, compared with Rs. 4,60,047.84 crore in FY 2024-25, reflecting healthy year-on-year growth. The company’s total debt stands at Rs. 4,36,470.39 crore, which is used primarily to finance rolling stock, railway projects, and other infrastructure assets. 

The AUM portfolio is highly secure, with 92.56 percent of assets linked to the Ministry of Railways, resulting in minimal credit risk. The AUM composition includes Lease Receivables from Project Assets (51.74 percent), Lease Receivables from Railway System Assets including NTPC BOBR rakes (27.48 percent), Advances against Railway Infrastructure Assets to be leased (13.36 percent), and Loans to Companies (7.42 percent). This diversified yet low-risk asset mix, combined with a strong asset base and government-backed business model, supports IRFC’s financial stability and long-term growth.

Company Overview

Indian Railway Finance Corporation (IRFC) is the dedicated financing arm of the Ministry of Railways, Government of India. The company is engaged in financing the acquisition of rolling stock, railway infrastructure projects, and other railway assets. 

IRFC raises funds from domestic and international markets and provides financial support for the expansion and modernization of India’s railway network. Backed by the Government of India, the company benefits from stable cash flows, strong credit quality, and a low-risk business model, making it a key contributor to railway infrastructure development.

Recent Quarter Results

Coming into financial highlights, Indian Railway Finance Corporation Limited’s revenue has increased from Rs. 6,723 crore in Q4 FY25 to Rs. 7,336 crore in Q4 FY26, which has grown by 9.12 percent. The net profit has also grown by 0.12 percent from Rs. 1,682 crore in Q4 FY25 to Rs. 1,684 crore in Q4 FY26. Indian Railway Finance Corporation Limited’s revenue and net profit have grown at a CAGR of 12 percent and 10 percent, respectively, over the last five years.

In terms of return ratios, the company’s ROCE and ROE stand at 5.64 percent and 12.8 percent, respectively. Indian Railway Finance Corporation Limited has an earnings per share (EPS) of Rs. 5.36, and its debt-to-equity ratio is 7.69x.

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