Market Brief: IRFC Offer for Sale Update The Government of India has officially decided to skip the oversubscription option for the **Indian Railway Finance Corporation (IRFC)** Offer for Sale (OFS). This decision follows a lukewarm response on the opening day of the issue, which was reserved for non-retail investors. The government originally planned a base offer of **2%** equity, with a "green shoe" or oversubscription option for an additional **2%**. By skipping this option, the total divestment is now capped at the base size of **26.13 crore shares**. Subscription and Pricing Data Non-retail bidding on February 25, 2026, saw a subscription of **95%** for the institutional portion. This left an undersubscription of approximately **1.18 crore shares** at the close of the first day. The floor price for the offer was set at **₹104** per share. At this level, the initial base offer is valued at roughly **₹2,718 crore**, significantly lower than the **₹5,436 crore** target that would have been reached had the full **4%** stake been sold. Stock Market Impact Following the announcement, IRFC shares faced significant downward pressure on the exchanges. The stock closed at **₹104.43** on the NSE, marking a sharp decline of **4.6%** in a single session. The current trading price is hovering just above the OFS floor price. This move has pushed the stock to a new **52-week low**, reflecting a persistent "supply overhang" as the market absorbs the additional equity. Sector Performance and Outlook The broader railway sector is currently navigating a period of high volatility despite robust government backing. * **Capex Allocation:** The Union Budget for FY25-26 has earmarked a record **₹2,62,200 crore** for railway capital expenditure. * **Infrastructure Targets:** Ongoing projects aim to expand the network by **307 km** by 2030, with a focus on freight capacity and electrification. * **Market Sentiment:** Peer companies like RVNL and Texmaco Rail have also seen price corrections recently, attributed to margin compression and high valuations despite strong order books. Shareholding and Regulatory Goals As of December 2025, the government held an **86.36%** stake in IRFC. The primary objective of this OFS is to move closer to the SEBI-mandated **75%** limit for public shareholding in listed entities. Despite the current market cooling, IRFC reported a record profit after tax of **₹1,802 crore** for the quarter ended December 2025, representing an **11%** year-on-year growth. Net interest margins also saw an improvement of **8%** during the same period. The retail portion of the OFS opens on February 26, 2026, allowing individual investors to bid for the remaining shares at the established floor price.