Key highlights:
Price band: ₹25-26 per equity share
Lot size: 575 shares
Issue size: ₹4,600 Cr
Issue opens on: 18 January 2021
Issue closes on: 20 January 2021
Basis of allotment date: 25 January 2021
Initiation of refunds: 27 January 2021
Credit of shares to Demat account: 28 January 2021
Expected listing date: 29 January 2021
Click here to apply for this IPO
About the company
Founded in 1986, the Indian Railway Finance Corporation (IRFC) is a non-banking financial company (NBFC) that was started by the government to finance the Indian Railways. The company helps finance assets such as locomotives, coaches, wagons, trucks, containers, cranes, and trollies. It leases railway infrastructure assets and national projects of the Government of India and lends to other public and private companies working under the Ministry of Railways.
The company has a near-monopoly in the railway-financing space. For instance, in FY17, FY18, FY19 and FY20, the NBFC financed 72%, 93%, 82% and 76% of the Indian Railway’s total rolling stock. As of 30 September 2020, the total value of rolling stock assets financed by IRFC stood at ₹2.3 lakh crore.
The company’s total revenue from operations has steadily increased in the past three years. It grew 19.3% from ₹9,207.8 crore (FY18) to ₹ 10,987.3 crore in FY19, and another ₹13,421 crore (+22.1% ) in FY20. IRFC has already clocked ₹7,384.8 crore in the first half of FY21.
Profits have seen an uptrend in this interval too. In FY18, FY19 and FY20, the company’s profits stood at ₹2,001.4 crore, ₹2,139.9 crore and ₹3,192 crore respectively. For the first half of the current fiscal, the company posted profits of ₹1,886.8 crore.
About the IPO
IRFC is a wholly-owned entity of the government of India, and functions under the Railway Mistry. Through this initial public offer, the government will sell 178.21 crore equity shares, totalling to over ₹4,200 crore. The IPO comprises a fresh issue of 118.80 crore equity shares and an offer for sale of 59.4 crore equity shares. The public issue is part of the government’s target to raise ₹2.1 lakh crore via disinvestments.
The proceeds of the offer for sale shall be received by the government. Meanwhile, the capital raised from the fresh issue will be utilised for funding business growth and general corporate purposes.
For the IPO, the QIB quota is capped at 50% while retail and HNI categories have been allotted a minimum of 35% and 15%, respectively. To know more, read the IRFC IPO draft red herring prospectus here. We’ll keep you posted on all the latest details about this IPO. Stay tuned!
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