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

IBEF:  January 14, 2021

Indian Railway Finance Corporation (IRFC), set up in 1986, is a dedicated financing arm of the Indian Railways and the first non-banking financial company (NBFC) in the PSU sector that is going public

IRFC's initial public offering (IPO) of about Rs. 4,600 crore (US$ 628.51 million) will hit the markets next week. The three-day public issue will close on January 20. IRFC is issuing shares at a price band of Rs. 25 (US$ 0.34) to Rs. 26 (US$ 0.36). 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 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.

The proceeds from the fresh issue are likely 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.

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.

IRFC 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.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.