Indian Railway Finance Corporation Limited

Indian Railway Finance Corporation Limited (IRFC) is the dedicated market borrowing and financing arm of the Indian Railways, operating under the administrative control of the Ministry of Railways, Government of India. Incorporated on December 12, 1986, as a Schedule A public sector enterprise, IRFC is registered with the Reserve Bank of India as a Systemically Important Non-Deposit Taking Non-Banking Financial Company (NBFC-ND-SI) and an Infrastructure Finance Company (NBFC-IFC). The company became the first railway NBFC PSU to be listed on Indian stock exchanges through its January 2021 IPO. IRFC's core business is to mobilize financial resources from domestic and overseas capital markets to meet the Extra Budgetary Resources (EBR) requirements of the Indian Railways. It primarily finances the acquisition of rolling stock assets - including locomotives, passenger coaches, freight wagons, and electric multiple units - as well as railway infrastructure assets and national rail projects. The company enters into standard lease agreements with the Ministry of Railways, typically spanning 30 years (a primary period of 15 years followed by a secondary period), under which the full asset value, including interest and a margin, is recovered from the MoR. After the lease period, assets may be transferred to the MoR at a nominal price. IRFC operates on a low-risk, cost-plus leasing model. Because the Ministry of Railways has a strong track record of fulfilling its payment obligations, the company has historically maintained zero non-performing assets (NPAs) and consistently earned high credit ratings (CRISIL AAA/A1+, ICRA AAA/A1+). Beyond rolling stock, IRFC also extends loans to entities operating under the Ministry of Railways, such as Rail Vikas Nigam Limited. Its strategic importance to national rail infrastructure, coupled with full Government of India backing, has enabled the company to raise funds at highly competitive rates from both domestic and international capital markets.

IRFC raised approximately Rs 1,390 crore from 31 anchor investors ahead of the IPO, with shares allotted at the upper price band of Rs 26 per share on January 15, 2021. About 61% of the anchor allocation went to domestic mutual funds, including HDFC, Nippon Life, Invesco, and ITPL. The Government of Singapore subscribed to approximately 16.93% of the anchor portion, with other participants including SBI Pension Fund, Kotak Mahindra International, and various insurance companies.