The Hindu Business Line : IRFC invites bids for raising Rs 1,000 cr

New Delhi, May 20 The Indian Railway Finance Corporation (IRFC), the finance raising arm of Indian Railways, has kicked off the borrowing plan for Railways’ assets this fiscal by inviting bids to raise up to Rs 1,000 crore from the domestic market, official sources said.

In 2008-09, IRFC has a target to raise a record Rs 6,907 crore for financing Railways assets. IRFC recently invited proposals from investors for selling bonds in four tranches.

Bonds issue

These are 10-year bonds with bullet repayment, 15-year with amortised equal repayment every year, 20-year with amortised equal repayment every year and 20-year with bullet repayment. The bonds will be sold through book-building process.

With Government Securities firming up during the past few days and yields for ten-year bonds touching 7.99 per cent (near the highest levels in the last few years), IRFC may take a re-look at the extent of funds to be raised.

Target raised

In 2007-08, IRFC raised the targeted Rs 4,609 crore at an average cost of 9.3 per cent, which was on the higher side given the organisation’s track in the last few years.

IRFC has raised funds for buying almost 50 per cent of the Railways rolling stock.

In terms of capacity and traction power, over 60 per cent of the Railways assets capacity is funded by IRFC. The book value of these assets is about Rs 44,158 crore.

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