IRFC OFS: The offer for sale (OFS) by railway PSU stock, Indian Railway Finance Corporation (IRFC), is set to open for retail investors today, February 26, after it failed to get full subscription from the institutional buyers.
The multibagger PSU stock‘s ₹5,430 crore OFS was booked 94.98% on the first day. At an indicative price of ₹104.12 apiece, institutional investors put in bids for about ₹2,326 crore.
Now, the offer will open for retail investors. Given the IRFC OFS’ floor price of ₹104, which is not at any material discount from the current levels and the possibility of future such divestment by the government, analysts see little value for retailers to participate in the offer.
On Wednesday, IRFC share price closed the day at ₹104.56, down 4.46%. The stock has remained under pressure in the near term, losing 17% so far in 2026 and 15% in a year. That said, its long-term performance remains robust. The PSU stock has offered multibagger returns of 275% and 318% in three and five years, respectively, according to NSE data.
IRFC OFS: Should retail investors apply?
IRFC OFS is more a regulatory necessity than a genuine market event. The public shareholding in IRFC should be greater than 25% as per Sebi norms, and the current promoter holding in the PSU stock is currently 86.36%, which would decline to 82.36% post the OFS.
This means that the government (promoter of IRFC) will dilute further at a discounted price, which could lead to more selling pressure in the future, noted Abhinav Tiwari, Research Analyst at Bonanza.
The OFS floor price is also close to the 52-week low levels. According to analysts, this offers little opportunity for retail investors to participate in the offer.
“Retail investors should approach this opportunity with pragmatism, as the OFS does not offer a specific retail discount, reducing the “margin of safety” compared to buying directly from the secondary market,” opined Vinit Bolinjkar – Head of Research at Ventura.
He added that the decision should not be driven by the pursuit of quick listing gains, which are unlikely given the oversupply of shares, but rather as a means to accumulate shares in a monopoly financing arm with a steady dividend yield for the long term.
“For those seeking immediate momentum, the secondary market may offer better price discovery once the initial OFS volatility settles,” Bolinjkar said.
IRFC shares: Outlook
IRFC’s stock outlook remains firm despite near-term price pressures as its underlying fundamentals are strong.
IRFC reported a record Q3 net profit of ₹1,802 crore, and its Assets Under Management (AUM) have reached ₹4.75 lakh crore. Moreover, IRFC is going through a strategic evolution following the IRFC 2.0 plan, which has an aim to shift from the traditional one-client model (Ministry of Railway) to multi client model, which will encompass the broader railway ecosystem and strategically linked infrastructure sectors.
They have a 60:40 target by FY30, wherein 60% of the AUM will come from traditional Indian Railways leasing, while 40% derive from higher margin opportunities in the broader railway ecosystem. This strategy has led to the expansion of the Net Interest Margin (NIM) to 1.51% in Q3FY26, which is the best NIM performance in 3 years, highlighted Tiwari.
“If IRFC is able to navigate towards the 60:40 portfolio mix while maintaining its Zero NPA record, it can be a stable and a long term bet for the investors,” the Bonanza analyst noted.
Bolinjkar also shared a cautiously optimistic outlook for IRFC shares, as once the government’s divestment target is met and the extra supply absorbed by institutional investors, the focus will shift back to IRFC’s vital role in supporting India’s extensive railway infrastructure growth.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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