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India announced plans to sell up to a 2 per cent stake in Indian Railway Finance Corporation (IRFC), the financing arm of Indian Railways, in a move that could fetch more than Rs 2,300 crore and help advance the government’s disinvestment programme for FY27.
The stake sale will be carried out through an offer for sale (OFS), with a floor price of Rs 91 per share, according to the Department of Investment and Public Asset Management (DIPAM).
Under the offer, the government will initially divest a 1 per cent stake in IRFC and retain the option to sell an additional 1 per cent through a greenshoe option if investor demand is strong. The OFS will open for non-retail investors on Wednesday and for retail investors on Thursday.
“Offer for Sale for Indian Railway Finance Corporation (IRFC) opens tomorrow for Non Retail investors. Retail investors can bid on Thursday. Government offers to disinvest 1 per cent equity in the IRFC along with additional 1 per cent as green shoe option,” DIPAM Secretary Arunish Chawla said in a post on social media platform X.
A total of 26.13 crore shares, representing up to 2 per cent of IRFC’s equity capital, will be offered for sale. At the floor price of Rs 91 per share, the transaction is expected to generate more than Rs 2,300 crore for the exchequer.
Discount to market price
The floor price is nearly 7.8 per cent lower than IRFC’s closing price of Rs 98.37 on the BSE on Tuesday. Shares of the company ended the day 2.53 per cent lower ahead of the announcement.
The latest stake sale forms part of the government’s broader strategy to raise non-tax revenues and increase public shareholding in state-owned enterprises. In the Union Budget for FY27, the Centre set a target of Rs 80,000 crore from disinvestment and asset monetisation initiatives.
The IRFC sale comes amid a renewed push by the government to monetise assets and unlock value from public sector enterprises. Earlier this month, the Centre completed a 5 per cent stake sale in General Insurance Corporation of India, which drew strong investor interest.
According to official data, the government has raised around Rs 16,480 crore through minority stake sales in public sector enterprises, banks and insurance companies so far in the current fiscal year.
Previous attempt at IRFC stake sale
The government had attempted a larger stake sale in IRFC earlier this year. In February, it proposed to sell up to 4 per cent of the company but managed to offload only 1.71 per cent. Following that transaction, the Centre’s holding in IRFC stood at 84.65 per cent.
IRFC, a Navratna public sector enterprise under the Ministry of Railways, serves as the principal financing vehicle for Indian Railways. Established in 1986, the company raises funds from domestic and overseas markets to support railway infrastructure projects, rolling stock procurement and network expansion.
The company is also registered with the Reserve Bank of India as a systemically important non-deposit-taking non-banking financial company and infrastructure finance company.
With several transactions in the pipeline, the Centre is expected to continue tapping capital markets to meet its FY27 disinvestment target while broadening retail participation in state-owned companies.
With inputs from agencies.
