The Hindu Business Line : IRFC to raise Rs 500 cr thru bonds

Indian Railway Finance Corporation (IRFC), the finance mobilising arm of Indian Railways, is in the process of raising Rs 500 crore by issuing bonds in the domestic market.

"We decided to enter the market as the rates are good now as compared to March. There is greater liquidity," official sources told Business Line, adding that IRFC planned to raise additional funds through loans and external commercial borrowings during the year.

This is the initial tranche of the total amount of Rs 4,170 crore that IRFC is budgeted to raise for Indian Railways in 2006-07 financial year.

IRFC raised Rs 3,890 crore in 2005-06 fiscal. This included Rs 3,450 crore for Indian Railways and Rs 440 crore for Rail Vikas Nigam Ltd (RVNL). RVNL is a special purpose vehicle of Indian Railways and helps finance bankable port connectivity projects of Indian Railways through public-private partnership route, amongst others.

Revised upward

Indian Railways, which had sought Rs 3,400 crore for fiscal 2005-06 through IRFC as per the budget estimates, had revised the amount upward to Rs 3,450 crore towards year-end. "The entire amount has been raised at an average cost of about 7 per cent and an average tenure of about eight years," said the sources.

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