The Government of India has launched a significant stake sale in the Indian Railway Finance Corporation (IRFC) through an Offer for Sale (OFS), primarily to comply with SEBI’s 75% public shareholding requirement. The offer, which opened on February 25, 2026, for institutional investors and February 26 for retail participants, includes a base 2% stake with an additional 2% green shoe option. This potential 4% divestment involves approximately 52.27 crore shares, with the government’s stake expected to drop from 86.36% to roughly 82.36%. The floor price for the transaction is set at ₹104 per share, representing a discount to the recent market close. At this price, the government aims to raise nearly ₹5,430 crore. The stock has experienced a recent cooling period, currently trading near ₹105 with a 52-week range between ₹104.40 and ₹148.95. Market analysts have expressed a degree of caution. While the company maintains zero non-performing assets and a healthy dividend payout ratio of approximately 31%, the OFS floor price offers a limited immediate upside. Investors are closely watching the Price-to-Earnings (PE) ratio, currently at 20.41, which sits slightly above the historical median but remains competitive within the sector. The financial performance of IRFC remains robust, driven by its role as the primary funding arm for the Ministry of Railways. In a major recent development, the company secured a USD 400 million (JPY equivalent) loan from a consortium of Japanese banks. This follows a USD 300 million facility in late 2025, aimed at lowering borrowing costs and funding critical rail infrastructure. Total revenue for the 2025 fiscal year reached approximately ₹27,156 crore, reflecting steady annual growth of nearly 2%. Profit After Tax (PAT) stood at ₹6,502 crore. The company is actively transitioning to a multi-client model to diversify beyond the Ministry of Railways, which currently accounts for over 99% of its exposure. The dividend profile remains a key attraction for long-term holders. IRFC recently declared an interim dividend of ₹1.05 per share, its highest to date, contributing to a current dividend yield of approximately 1.5%. Future performance is expected to be dictated by the government’s continued capital expenditure in the railway sector and the company’s ability to manage its high debt-to-equity ratio, which is currently around 7.8x. While liquidity is high, the massive supply of shares from the OFS may create a temporary price ceiling until the market absorbs the new volume.