Railway PSU Under Pressure: IRFC Slumps Despite Strong ₹1,802 Cr Quarterly Profit

IRFC Stock Market: Wednesday morning came as a shock for investors in Indian Railway Finance Corporation (IRFC), one of the most promising stocks in the Indian railway sector. While the entire market was buoyed by the green today, IRFC shares witnessed intense selling pressure. As soon as the market opened, the stock fell by nearly 4 percent, reaching ₹104.75, a new 52-week low.

The biggest and primary reason for this massive decline is the central government’s decision to sell its stake in the company. The government has completed preparations to reduce its 4 percent stake through an offer for sale (OFS), which is clearly causing panic among retail investors.

The sudden decline in IRFC shares is not due to any weakness in the company’s performance, but rather to the government’s disinvestment process. The government has decided to sell its total 4 percent stake in the company, with approximately 2 percent being sold in the first phase. The offer opened for institutional investors on February 25th, while the opportunity for general retail investors will be available on February 26th.

Currently, the government’s total stake in IRFC is 86.36 percent, which is well above SEBI’s minimum public shareholding requirements. According to the regulations, a promoter’s stake in any listed company must be less than 75 percent, and to comply with this legal requirement, the government is gradually reducing its stake. The news of a sudden increase in the supply of shares in the market has pushed prices down.

Although the share price is currently falling, the company’s financial position still appears to be quite strong. In the October-December 2025 quarter, IRFC reported revenue of over ₹6,661 crore and a net profit of ₹1,802 crore. For the entire fiscal year 2025, the company’s revenue exceeded ₹27,000 crore, and profits were recorded at approximately ₹6,500 crore.

These figures clearly indicate that the company is facing no business problems. This monopoly company, which funds railway expansion, had over 5.1 million retail investors as of December 2025, a testament to its popularity and trust. The company’s market cap currently hovers around ₹1.37 lakh crore.

IRFC’s stock has delivered negative returns of approximately 15 percent to its investors over the past six months and has fallen nearly 30 percent from its 52-week high of ₹148.90. Market experts believe that stock prices often come under pressure during government sell-offs because the floor price for the offer for sale is often set slightly below the market price.

For investors looking to bet on the railway sector’s growth over the long term, this decline could prove to be an attractive buying opportunity, but it would be wise to wait for the market sell-off to subside before making a new entry. In the current situation, any hasty decisions should be avoided, and investment decisions should be made with utmost caution.