Everything You Need To Know About Indian Railways Financial Corporation IPO


Being incorporation in 1986 Indian Railway Finance corporation is the Government of India owned branch which engages in financing the acquisition of rolling stock assets, leasing of railway infrastructure assets, and lending to entities under the Ministry of Railways and registered with the Reserve Bank of India as an non-banking financial corporation – Infrastructure financing company (NBFC-ND-IFC).

With that primary information out of the way, IRFC has scheduled it’s IPO on 18th January 2021 and experts expect a successful IPO rollout for the firm. In it’s filing document, the company names the following objects pertaining to the fresh issue-

1- Augmenting of Equity Capital Base To Meet Future Capital Requirements Arising Out of Growth in Business 

Given that IRFC is in the business of assisting Asia’s largest rail network and operation, running 13,452 trains every day to transport 22.70 Million individuals per day, the company requires a substantial working capital for it’s sustained operations. Furthermore, on account of the company being registered as NBFC-ND-IFC public deposits are not admissible. So far, the only methods of raising capital have been through the issue of bongs, term loans from banks and financial institutions, off shore borrowing borrowings to finance a protion of the annual plan outlay of the Indian Railways.

To address these issues and to augment the equity capital base to meet future capital requitements which are expected to arise out of growth in the company’s assets, primarily in the company’s loans and advances, lease receivables and other investments.

2. General Corporate Purposes 

As dictated by regulations established by SEBI  ICDR regulations IRFC proposes to deploy the net proceeds estimated at an aggregate of up to ₹ 4,633.38 Cr towards utilisations not exceeding 25% of gross proceeds of fresh issue. These costs include exegencies and expenses incurred by the company in ordinary course of business and towards other business costs including expansionary expenses as determined by the board and core management.

The IPO will begin on January 18th 2021 and close on January 20th 2021 starting off with a face value of INR 10 per equity share and an IPO price of INR 25 per equity share. IRFC will be listen on BSE and NSE both with a frersh issue of 1,188,046,000 stocks with retail individual investor being allowed to apply for up to 13 lots amounting to 7475 shares worth INR 1,94,350.