IRFC Share Price Rises 1% as Open Offer Opens to Retail Investors, Oversubscription Eludes Institutional Buyers

Indian Railway Finance Corporation (IRFC) Share Price Advances Ahead of Retail Offer for Sale (OFS)

Key Highlights

• IRFC's stock price rose around 1% on Thursday, February 26, ahead of the retail portion of its OFS, which is scheduled to open today.
• The stock reached a day's high of ₹105.30, up to 0.7% from the previous day's close.
• Institutional investors participated in the OFS on Wednesday, February 25, placing bids for around 22.34 crore shares, representing 94.98% of the 23.52 crore shares set aside for them.

Offer for Sale (OFS) Details

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• The floor price for the OFS has been fixed at ₹104 per share.
• The government chose not to exercise the oversubscription option, which means the initial planned base offer of 261,370,120 equity shares will be the only shares sold.
• Following the proposed divestment, the government will continue to hold a substantial 86.36% stake in IRFC.

Funding and Strategic Transformation

• IRFC has signed a loan agreement to raise funds equivalent to $400 million in Japanese yen through the External Commercial Borrowing (ECB) route.
• The five-year, unsecured loan will be benchmarked to the Tokyo Overnight Average Rate (TONAR).
• IRFC is undergoing a strategic transformation under its IRFC 2.0 roadmap, which aims to move beyond the traditional single-client structure to a multi-client model.

Financial Performance

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• IRFC posted a record net profit of ₹1,802 crore in the December quarter.
• Its Assets Under Management (AUM) climbed to ₹4.75 lakh crore.
• The company has given multibagger returns, surging 325% in 5 years, but has been under pressure recently, down 8% in the past 1 month, 11% in 3 months, and 15% in 1 year.