The government's Offer for Sale (OFS) in Indian Railway Finance Corporation (IRFC) saw strong investor demand on the first day, with the issue subscribed 1.86 times, leading to the exercise of the green shoe option. The Department of Investment and Public Asset Management (DIPAM) confirmed the development via social media platform X on Wednesday.
Government exercises green shoe option
DIPAM stated, "Offer for Sale in Indian Railways Finance Corporation (IRFC) received an enthusiastic response from the investors and was oversubscribed 1.86 times on the first day. Government has decided to exercise the green shoe option. Retail investors and employees get to bid on Thursday 25th June 2026."
The government had initially announced plans to sell up to a 2 per cent stake in IRFC through the OFS route. The base offer was 1 per cent of equity, with a green shoe option of an additional 1 per cent to be exercised if demand was strong. Following the robust response, the government opted to sell the additional stake, effectively doubling the size of the offering.
OFS mechanism and disinvestment strategy
An Offer for Sale (OFS) is a transparent mechanism for promoters, including the government in public sector enterprises, to sell shares on stock exchanges. This allows institutional and retail investors to bid during a specified period. The IRFC stake sale is part of the government's broader disinvestment programme aimed at reducing its holding in public sector undertakings while increasing public shareholding.
Market reaction and stock performance
Despite the strong OFS response, IRFC shares faced heavy selling pressure on Wednesday. The stock closed at Rs 92.50 per share on the National Stock Exchange (NSE), declining over 6 per cent from the previous close. Retail investors and eligible employees will have the opportunity to bid on Thursday, June 25.
About IRFC
IRFC is the dedicated financing arm of Indian Railways, responsible for raising funds for railway infrastructure and expansion projects. The company mobilises resources from domestic and international capital markets to support the financial needs of Indian Railways.
