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The primary objective of IRFC is to meet the predominant portion of ‘Extra Budgetary Resources requirement of the Indian Railways through market borrowings (PTI)
The primary objective of IRFC is to meet the predominant portion of ‘Extra Budgetary Resources requirement of the Indian Railways through market borrowings (PTI)

Indian Railway Finance Corporation (IRFC) IPO opens next week. Key things to know

  • IRFC is the first NBFC in the PSU sector that is going public
  • IRFC, set up in 1986, is a dedicated financing arm of the Indian Railways

Indian Railway Finance Corporation (IRFC)'s initial public offering (IPO) of about 4,600 crore will hit the markets next week. IRFC IPO will be the first by a non-banking financial company (NBFC) in the public sector. IRFC is the first NBFC in the PSU sector that is going public. The IPO will open on January 18 and close on January 20. IRFC is issuing shares at a price band of 25 to 26. The lot size is 575.

IRFC is offering up to 178 crore equity shares of face value of Rs. 10 each. The initial public offering comprises of a fresh issue of up to 118.8 crore equity shares (“fresh issue") and an offer for sale of up to 59.4 crore equity shares by the government.

In January 2020, IRFC had filed draft papers for its IPO. The issue is of up to 178.20 crore shares, comprising a fresh issue of up to 118.80 crore shares and offer for sale of up to 59.40 crore shares by the government, according to the draft prospectus.

IRFC said the net proceeds from the fresh issue are proposed to be utilised for augmenting the equity capital base of the Company to meet their future capital requirements arising out of growth in their business and for general corporate purposes.

DAM Capital Advisors Limited (formerly known as IDFC Securities Limited), HSBC Securities and Capital Markets (India) Private Limited, ICICI Securities Limited and SBI Capital Markets Limited are the Book Running Lead Managers to the Issue.

IRFC, set up in 1986, is a dedicated financing arm of the Indian Railways for mobilizing funds from domestic as well as overseas markets. Its primary objective of IRFC is to meet the predominant portion of ‘Extra Budgetary Resources’ (EBR) requirement of the Indian Railways through market borrowings at the most competitive rates and terms.

According to its website, IRFC, is a Schedule ‘A’ Public Sector Enterprise under the administrative control of the Ministry of Railways, Govt. of India and non–deposit taking Non Banking Financial Company (NBFC) and Infrastructure Finance Company (NBFC- IFC) with Reserve Bank of India (RBI).

The Union Cabinet had in April 2017 approved listing of five railway companies. Four of them -- IRCON International Ltd, RITES Ltd, Rail Vikas Nigam Ltd and Indian Railway Catering and Tourism Corp (IRCTC) - have already been listed. (With Agency Inputs)

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