India govt to exercise oversubscription option for 0.86% stake in IRFC OFS - BSE notice

The Government of India has decided to exercise the greenshoe option for an additional 0.86% stake in the Indian Railway Finance Corporation (IRFC) Offer for Sale (OFS), according to a notice from the Bombay Stock Exchange (BSE). This move follows strong investor demand for the initial OFS offering, which saw a significant subscription from both institutional and retail investors. The greenshoe option allows the government to offload an additional block of shares beyond the initial offering, subject to market conditions and investor appetite.

The OFS, which initially aimed to sell up to 2% of the government’s stake in IRFC, was launched with a floor price of ₹104 per share. The government had previously announced plans to raise approximately ₹5,430 crore through the stake sale, with the proceeds expected to contribute to the country’s fiscal consolidation efforts and broader disinvestment strategy. The decision to exercise the greenshoe option indicates that the government is capitalizing on favorable market conditions to maximize the value of its disinvestment in the railway financing arm.

IRFC, a Navratna public sector undertaking, plays a critical role in financing infrastructure development for Indian Railways. The company has demonstrated strong financial performance in recent quarters, including the declaration of a second interim dividend for FY 2025–26, which totaled ₹2.10 per share. Despite the recent share price volatility, IRFC continues to maintain a robust balance sheet and a key role in supporting India’s railway expansion and modernization initiatives.

The government’s decision to offload additional shares through the OFS aligns with its broader strategy to reduce fiscal deficits and promote private sector participation in strategic sectors. The proceeds from the stake sale will be used to support public spending priorities and further economic development. Investors are advised to monitor the market response to the greenshoe option and assess the long-term implications for IRFC’s valuation and operational performance.