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IRFC- IPO Note
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IPO DETAILS

Offer Details

Price band

Rs 25-26

Offer Open Date

18th Jan 2021

Offer Close Date

20th Jan 2021

   Credit of Share/Listing Date (Est)

28th Jan 2021 / 29th Jan 2021

Lot Size

575 Shares and Multiple thereof

Offer for Sale

60 Cr Shares

Fresh Issue

118 Cr Shares

Total Issue Size

178 Cr Shares aggregating up to ₹4633 Cr

Face value

₹ 10 per EQ Share

Issue Type

Book Built Issue IPO

Book Building

QIBs

890,934,500 shares amounting to ₹2,227-2,316 Cr

Non-Institutional

267,280,350  shares amounting to ₹668-695 Cr

Retail

623,654,150 shares amounting to ₹1,559-1,622 Cr

Exchange

NSE , BSE

Capital Structure

Pre-Issue Promoter Share Holding

100%

Post Issue Promoter Share Holding

86%


OBJECTIVE OF THE ISSUE

  1. To Augmenting the equity capital base to meet the future capital requirements arising out of growth in the business.
  2. To achieve the benefits of listing of the Equity Shares on the Stock Exchanges and enhancement of the company’s brand name and creation of a public market for their Equity Shares in India.
COMPANY PROFILE
  1. Indian Railway Finance Corporation Limited (“IRFC”) is the dedicated market borrowing arm of the Indian Railways. Their primary business is financing the acquisition of rolling stock assets, which includes both powered and unpowered vehicles, for example locomotives, coaches, wagons, trucks, flats, electric multiple units, containers, cranes, trollies of all kinds and other items of rolling stock components as enumerated in the Standard Lease Agreement (collectively, “Rolling Stock Assets”), leasing of railway infrastructure assets and national projects of the Government of India (collectively, “Project Assets”) and lending to other entities under the Ministry of Railway (MoR).
  2. The Union Budget proposed a capital expenditure of ₹ 161,000 crore for the Indian Railways for Fiscal 2021, which was higher than the capital expenditure (revised estimate) of ₹ 148,064 crore in Fiscal 2020. The outlay for Fiscal 2021 comprises ₹ 70,250 crore from gross budgetary support, ₹ 7,500 crore from internal resources and ₹ 83,292 crore from extra budgetary resources (“EBR”).
  3. In Fiscals 2017, 2018, 2019 and 2020 (revised estimate), IRFC were responsible for financing 72%, 93%, 84% and 76%, respectively, of the rolling stock purchased by them and leased to the MoR. The total value of Rolling Stock Assets financed by IRFC as of March 31, 2020 and as of September 30, 2020 was ₹ 223,810.78 crore and ₹ 234,627.17 crore, respectively, while the value of Rolling Stock Assets financed in Fiscal 2020 and in the 6 months ended September 30, 2020, was ₹ 33,544.11 crore and ₹ 10,816.38 crore, respectively.
CONCLUSION

We recommend this IPO. 

IRFC plans to increase its financing portfolio by funding Project Assets such as decongestion of railway network, expansion of existing network and future requirements under the public private partnership mode.

In the future, the company also plans to expand to forward and backward linkages to the railway sector and become a holistic infrastructure financing company that will benefit from the proposed GoI investments, budgetary allocations and expansion of railway network by opening up to the private sector.


To Read our detailed report, please click here- Link

Source: DRHP

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