IRFC raises ₹2,120 cr via 15-year bonds issue

Our Bureau New Delhi | Updated on July 03, 2019

The Indian Railway Finance Corporation (IRFC), the dedicated financing arm of the Indian Railways that mobilises funds from domestic as well as overseas capital markets, announced on Wednesday that it has raised ₹2,120 crore by issuing 15-year tenure bonds through a book-building process.

The issue consists of 21,200 secured redeemable non-cumulative taxable bonds of ₹10 lakh each at a coupon of 7.85 per cent a year.

Vijay Kumar, Managing Director, IRFC, and Financial Commissioner, Indian Railways, said that they saw a high demand for the 15-year bonds with the company receiving bids for double the amount it wanted to raise.

“This issue saw demand from many investors who trust the creditworthiness of the IRFC. So far, we have raised ₹10,000 crore in the first quarter itself through various sources including taxable bond issuance, structured bilateral deal and syndicated foreign currency loans,” Kumar said.

The issue received overwhelming response from domestic investors with 85 bids coming in for an aggregate sum of ₹4,940 crore. The base issue size was ₹500 crore and was subscribed 9.88 times. The pool of investors are well diversified with banks, LIC and the NPS being the major investors.

The IRFC has set a benchmark and paved the way for other issuers in India for raising ultra long-term funds as this is the first 15-year bond issuance in the domestic market by a government NBFC in recent years, added the release.

Published on July 03, 2019

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