Stocks

IRFC initial public offering subscribed over 3.5 times

OUR BUREAUNew Delhi, January 20 New Delhi | Updated on January 20, 2021

Indian Rail Finance Corporation’s (IRFC) IPO has been over-subscribed by three times with 435.32 crore bids received for 124.75 crore shares on offer. The IPO of the dedicated fund raising arm of Indian Railways closed on Wednesday.

The portion for qualified institutional buyers was subscribed 3.78 times while non-institutional investors 2.67 times and retail individual investors by 3.66 times.

Funds’ use

The price band for the IPO is ₹25-26 an equity share. From about ₹4,600 crore that the IPO is expected to mop up, roughly about ₹1,500 crore will go to Government and two-third will accrue to IRFC, which will add to company's net worth and enable IRFC to raise more money from the market.

IRFC is the first pubic sector unit, whose IPO opened for anchor investors – the institutional investors who put in large, assured amount – and saw participation from Government of Singapore, Monetary Authority of Singapore, Goldman Sachs (Singapore), Kuwait Investment Authority Fund, and BNP Paribas Arbitrage Fund, among others.

Borrowings to go up

IRFC’s borrowing target for the present fiscal is expected to be revised upwards to ₹1.10 lakh crore, which means it will contribute to a large chunk of Railways’ capital expenditure.

Funds raised by IRFC are used for buying rolling stock like engine, wagons, coaches for Indian Railways, and to fund infrastructure of Indian Railways.

Published on January 20, 2021

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