IRFC raises Rs 5,350 cr through tax-free bond issue

Indian Railway Finance Corporation (IRFC), the fund mobilising arm of the Railways, has raised close to Rs 5,350 crore through its tax-free bond issue, which closed on Friday. The issue size was Rs 1,000 crore, with a green-shoe option to retain up to Rs 8.886 crore.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney SME Special
moneycontrol.com

Home » News » Markets » Bonds News

Feb 11, 2013, 02.45 PM | Source: Business Line

IRFC raises Rs 5,350 cr through tax-free bond issue

Indian Railway Finance Corporation (IRFC), the fund mobilising arm of the Railways, has raised close to Rs 5,350 crore through its tax-free bond issue, which closed on Friday. The issue size was Rs 1,000 crore, with a green-shoe option to retain up to Rs 8.886 crore.

Like this story, share it with millions of investors on M3

IRFC raises Rs 5,350 cr through tax-free bond issue

Indian Railway Finance Corporation (IRFC), the fund mobilising arm of the Railways, has raised close to Rs 5,350 crore through its tax-free bond issue, which closed on Friday. The issue size was Rs 1,000 crore, with a green-shoe option to retain up to Rs 8.886 crore.

Post Your Comments

Share Cancel

Indian Railway Finance Corporation (IRFC), the fund mobilising arm of the Railways, has raised close to Rs 5,350 crore through its tax-free bond issue, which closed on Friday. The issue size was Rs 1,000 crore, with a green-shoe option to retain up to Rs 8.886 crore.

As against an offer of one crore tax-free bonds (in the nature of secured redeemable non-convertible debentures), it received bids for 5.38 crore bonds. While 2.82 crore bids came in for series 1 (carries 7.38 per cent interest with 10-year tenor), another 2.56 crore bids for series 2 (7.43 per cent interest with 15-year tenor).

The bonds are proposed to be listed on the BSE and the NSE

With this, the company has mobilised close to Rs 6,500 crore this fiscal, as it had already raised Rs 1,100 crore through a private placement.

In the last two days of the issue, it raised about Rs 2,500 crore. IRFC had also raised Rs 1,650 crore through external commercial borrowings for a five-year tenure, at 3.417 per cent.

Falling short

IRFC has a budgeted target of raising Rs 15,000 crore fund in current fiscal.

It will have to mobilise about Rs 6,800 crore, unless the Indian Railways lowers the borrowing target for the firm. Of this, IRFC still has a tax-free window of about Rs 3,500 crore, for which it can enter the market again. “We will use options like term loans and external commercial borrowing window to raise the requisite amount. That will not be difficult,” said Rajiv Datt, Managing Director.

IRFC funds are primarily used to buy rolling stock, such as locomotives, wagons and coaches.

Till date, it has acquired 6,073 locomotives, 36,613 passenger coaches and 162,238 freight wagons for the Railways, which are valued at Rs 82,447 crore.

This ensures that the loans are securitised against rolling stock, allowing IRFC to raise funds at a lower cost.

In fiscal 2011-12, the company funded the acquisition of 506 locomotives, 2,757 passenger coaches and 13,208 freight wagons, valued at Rs 12,604 crore. This was the highest ever funding of rolling stock by IRFC.

Ads by Google

Buy, Hold, Sell ? Hear it first on M3
IRFC raises Rs 5,350 cr through tax-free bond issue

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login