State-owned Indian Railway Finance Corp. to flag off 2021 IPO action

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The initial public offering (IPO) of state-owned Indian Railway Finance Corp. (IRFC) worth about 4,600 crore will hit the market on 18 January.

The price band of the issue has been fixed at 25-26 per equity share.

The issue is of up to 1.78 billion shares, comprising a fresh issue of up to 1.18 billion equity shares and offer for sale (OFS) of up to 594 million shares by the government, the company said. The issue will close on 20 January. The anchor book will open on Friday due to interest from various investor communities.

“IRFC coming up for listing with a 4,600 crore-plus issue in a price band of 25-26 per share. Anchor book on Jan 15 and the main book from Jan 18-20,” department of investment and public asset management (Dipam) secretary Tuhin Kanta Pandey said in a tweet on Wednesday. IRFC is the first government-owned non-banking financial company to go public.

The company’s managing director Amitabh Banerjee said that out of the money raised through the IPO, around 1,544.46 crore will go the government, considering the top price band of 26. The remaining 3,088.92 crore will go to the company’s balance sheet.

The net proceeds from the IPO will be used to augment the company’s equity capital base to meet its future capital requirements arising out of growth in their business, the company said in its draft red herring prospectus.

“Post IPO, the business of IRFC will remain unchanged. IPO is just a stage in the journey of IRFC. Ministry of Railways will continue to remain our principal client. We shall definitely contribute to the infrastructure development of Indian Railways. As far as the IPO proceeds are concerned, it will be handy in building up my net worth that will enable us to raise 10 times of the money from the market to fund the capex requirement,” Banerjee told Mint.

It is also open to diversifying its portfolio to any project that has backward or forward linkage with Indian Railways. “We are open to funding any sector that goes towards carrying capacity of the Indian Railways, in freight and passenger segment, logistics, multimodal logistics parks. We want to be a partner in that growth story also. Our primary goal is to cater to funding requirement of Indian Railways,” he said.

IRFC was set up in 1986 to raise money from the market and the capital expenditure requirement of Indian Railways. It is a dedicated market borrowing arm of the railways. It finances the acquisition of rolling stock assets—passenger, freight train sets—and project assets of the national transporter such as capacity augmentation projects, dedicated freight corridor, high-speed rail corridor.

The article was first published on livemint.com.

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.