To remain open till greenshoe option is filled

The Indian Railway Finance Corporation (IRFC) has raised Rs 1,613 crore through its tax-free bond issue till Wednesday. The Railways’ fund-raising arm — which was oversubscribed on Tuesday, the second day of the issue opening, will continue to remain open till it raises more funds through the greenshoe option.

“IRFC will keep the issue open till the greenshoe is filled up,” said a source.

IRFC, which has the Finance Ministry’s nod to mobilise Rs 10,000 crore through tax-free bonds, has already raised about Rs 1,340 crore through the private placement route.

The coupon rates are 8.23 per cent for 10-year bonds and 8.4 per cent for 15-year bonds for institutional investors. For retail investors, the rates are 8.48 per cent for 10 years and 8.65 per cent for 15-year bonds.

The money raised will be used to buy locomotives, wagons and coaches. In 2012-13, IRFC funds were used to acquire 581 locomotives, 1,958 coaches and 14,801 wagons. A small share of funds is also routed towards financing bankable railway projects.

In a related move, IRFC plans to raise $600 million through external commercial borrowing. It has raised Rs 2,500-2,600 crore from the external market till date in the current financial year.

(This article was published on January 8, 2014)
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