IRFC IPO ends with strong subscription

Published on Jan 21, 2021 10:22

The initial public offer (IPO) of Indian Railway Finance Corporation (IRFC) received bids for 435.32 crore shares as against 124.75 crore shares on, according to the stock exchange data. The issue was subscribed 3.49 times.

The qualified institutional buyers (QIBs) category was subscribed 3.78 times. The retail individual investors category was subscribed 3.66 times. The non-institutional investors category was subscribed 2.67 times.

The issue opened for subscription on Monday (18 January 2021) and closed on Wednesday (20 January 2021). The price band for the IPO was set at Rs 25-26 per share.

The IPO consisted of fresh issue of up to 118.80 crore equity shares and an offer of sale of up to 59.40 crore equity shares by the Government of India. Post issue, the government shareholding in the company will fall to 86.4%.

The company plans to utilize the net proceeds from the offer for augmenting equity capital base to meet future capital requirements arising out of growth in business.

In addition, the company expected to achieve the benefits of listing of equity shares on the stock exchanges and enhancement of the company`s brand name and creation of a public market for equity shares in India.

Ahead of the IPO, the company on 15 January 2021 allotted 53.45 crore shares to 31 anchor investors at a price of Rs 26 per share aggregating to Rs 1,389.86 crore.

Of the total anchor portion, about 61% was allotted to four domestic mutual funds which applied through 20 schemes. Further, about 16.93% of the total anchor portion was subscribed by the Government Of Singapore.

The company recorded net profit of Rs 1,886.84 crore and a total income of Rs 7384.83 crore in the six months ended on 30 September 2020.

Indian Railway Finance Corporation (IRFC) is the dedicated market borrowing arm of the Indian Railways with the primary business of financing the acquisition of rolling stock assets, which includes both powered and unpowered vehicles such as 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. The company is also in the business of leasing railway infrastructure assets and national projects of the Government of India and lending to other entities under the Ministry of Railways.

The company is a NBFC (Systemically Important), registered with the Reserve Bank of India, and classified under the category of an Infrastructure Finance Company. The company is notified as a Public Financial Institution.