Institutional investors subscribed 1.86 times the reserved portion in IRFC’s Offer for Sale (OFS), prompting the government to exercise the greenshoe option.
Highlights:
- Institutional portion of IRFC OFS subscribed 1.86 times.
- Bids worth over ₹1,900 crore received on Day 1.
- Government exercises 1% greenshoe option.
- Floor price fixed at ₹91 per share.
- Retail investors and employees can bid on June 25.
Indian Railway Finance Corporation (IRFC) witnessed strong demand from institutional investors on the first day of its Offer for Sale (OFS), with bids worth more than ₹1,900 crore being received for shares reserved for non-retail investors.
According to stock exchange data, institutional investors placed bids for more than 21.87 crore shares against the 11.76 crore shares earmarked for them. This translated into a subscription of 1.86 times, reflecting robust interest in the railway financing company despite recent volatility in the stock market.
The Government of India is divesting up to a 2 percent stake in IRFC through the OFS, equivalent to 26.13 crore shares. The sale was launched with a floor price of ₹91 per share, representing a discount of nearly 7.8 percent to the stock’s previous closing price.
Encouraged by the strong response, the government has decided to exercise the greenshoe option, which allows the sale of an additional 1 percent stake. Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said the offer received an enthusiastic response from investors, highlighting confidence in the public sector enterprise.
At the floor price, bids received from institutional investors alone are valued at more than ₹1,900 crore. The strong participation is being viewed as a positive signal for the government’s disinvestment programme and investor appetite for quality public sector stocks.
The next phase of the OFS will open for retail investors and eligible employees on June 25. Market experts believe the discounted offer price could attract significant participation from retail investors looking for exposure to India’s railway infrastructure growth story.
IRFC plays a critical role in financing the expansion and modernization of Indian Railways. As the dedicated financing arm of the railway sector, the company remains a key beneficiary of the government’s infrastructure and transportation investment plans.
Despite the successful bidding process, IRFC shares ended Wednesday’s trading session 6.24 percent lower at ₹92.53 on the BSE, reflecting the typical market reaction seen during large share sale transactions.
The IRFC stake sale is part of the government’s broader disinvestment strategy. So far in the current financial year, the Centre has raised approximately ₹16,480 crore through stake sales in public sector enterprises, banks, and insurance companies, including Coal India, NHPC, GIC, Central Bank of India, and NLC India.
