Let’s have a detailed review of the company and analytics of the Indian Railway Finance Limited IPO release date, IPO offer price, subscription, Indian Railway Finance IPO allotment, grey market price and other details like the company’s background, its financial positions, its promoters and other related things.
Indian Railway Finance IPO Review & Ratings
|IPO Ratings & Review|
|Top Brokers Review||7.8/10|
Summary of Indian Railway Finance IPO
They are the dedicated market borrowing arm of the Indian Railways. Their primary business is financing the acquisition of rolling stock assets, which includes both powered and unpowered vehicles, for example locomotives, coaches, wagons, trucks, flats, electric multiple units, containers, cranes, trollies of all kinds and other items of rolling stock components as enumerated in the Standard Lease Agreement (collectively, “Rolling Stock Assets”), leasing of railway infrastructure assets and national projects of the Government of India (collectively, “Project Assets”) and lending to other entities under the Ministry of Railways, Government of India (“MoR”).
From FY 2016-17 to FY 2018-2019, as per the Restated Financial Statements
- Their total revenue from operations increased by 15.65% from Rs.80,133.58 million in Fiscal 2017 to Rs.92,671.44 million in Fiscal 2018 and by 20.13% to Rs.111,323.21 million in Fiscal 2019, and was Rs.66,572.47 million in the six months ended September 30, 2019.
- In Fiscals 2017, 2018 and 2019, and the six months ended September 30, 2019, their profit for the period was Rs.9,211.71 million, Rs.20,490.86 million, Rs.22,546.61 million and Rs.17,147.96 million, respectively.
The Promoters of this company are THE PRESIDENT OF INDIA, ACTING THROUGH THE MINISTRY OF RAILWAYS, GOVERNMENT OF INDIA (“MoR”). The lead managers to the issue are IDFC Securities Limited, HSBC Securities and Capital Markets (India) Private Limited, ICICI Securities Limited, SBI Capital Markets Limited . The Registrar to this issue is KFin Technologies Private Limited.
Indian Railway Finance IPO Dates
The opening and the closing date of Indian Railway Finance IPO is not known yet.
Indian Railway Finance IPO Subscription
|Day / Date||NII||RII||Total Subscription|
|1st Day –|
|2nd Day –|
|3rd Day –|
|4th Day –|
|Shares Offered or Net Issue|
The shares subscribed by the public will be updated here.
Indian Railway Finance IPO Allotment Status
Here, you can find the Allotment Status of this IPO. Allotment of Equity Shares pursuant to the Fresh Issue and transfer of the Offered Shares of the Promoter Selling Shareholders pursuant to the Offer for Sale to the successful Bidders. However, the Allotment status is not yet disclosed.
|Basis of Allotment Finalization||–|
|Credit of Shares to Demat Account||–|
|Share Listing Date||–|
Indian Railway Finance IPO Price Band / Cash Price
The face value of each share is Rs.10, and the cash price of the IPO is Rs.[●].
Indian Railway Finance IPO Size
This Initial Public Issue of 1,407,069,000 Equity Shares of Rs.10 each for cash at a price of Rs.[●] per equity share aggregating to Rs.[●] Million.
Indian Railway Finance IPO Share Offering
Fresh Issue: The Fresh Issue of 938,046,000 Equity Shares by their Company of Rs.10 each at a price of Rs.[●] per equity share aggregating to Rs.[●] million,
Net Issue : The Net Issue of [●] Equity Shares of Rs.10 each at Rs.[●] per Equity Share aggregating to Rs.[●] million.
Offer for Sale : Offer for sale of up to 469,023,000 Equity Shares by the Promoter Selling Shareholder aggregating up to Rs.[●] Million.
Indian Railway Finance Limited – Company Overview
Over the last three decades, they have played a significant role in supporting the capacity enhancement of the Indian Railways by financing a proportion of its annual plan outlay. They are wholly-owned by the Government of India acting through the MoR.
They are registered with the Reserve Bank of India as a NBFC (Systematically Important) and are classified under the category of an “Infrastructure Finance Company” under Section 45-IA of the Reserve Bank of India Act, 1934. The Company as notified as a “Public Financial Institution” under the Companies Act, 1956 through a notification dated October 8, 1993 issued by the Ministry of Corporate Affairs.
Indian Railway Finance Leasing Model
They follow a financial leasing model for financing the Rolling Stock Assets. The period of lease with respect to Rolling Stock Assets is typically 30 years comprising a primary period of 15 years followed by a secondary period of 15 years, unless otherwise revised by mutual consent.
In terms of the leasing arrangements, the principal amount pertaining to the leased assets is effectively payable during the primary 15 years lease period, along with the weighted average cost of borrowing and a margin determined by the MOR in consultation with them at the end of each Fiscal.
Typically, the weighted average cost of borrowing factors in any expenses incurred by them with respect to any foreign currency hedging costs and/ or losses (and gains, if any) as well as any hedging costs for interest rate fluctuations. For the second 15 year period, they charge the Indian Railways a nominal rate which is subject to revision on mutually acceptable terms.
They also follow a leasing model for Project Assets, which typically provide for lease periods of 30 years. As of September 30, 2019, their total AUM, consisted of 60.80% of lease receivables primarily in relation to Rolling Stock Assets, 2.56% of loans to central public sector enterprises entities under the administrative control of MoR (“Other PSU Entities”), and 36.64% of advances against leasing of Project Assets.
Indian Railway Finance – Standard Lease Agreement
For all the Rolling Stock Assets acquired during a financial year by Indian Railways, they enter into a lease agreement with the MoR following the close of each respective Fiscal (the “Standard Lease Agreement”).
Lease rentals include the value of the Rolling Stock Assets leased by them to the MoR in the relevant fiscal year, the weighted average cost of borrowing as well as a certain margin, all in accordance with the terms of the Standard Lease Agreement.
In Fiscal 2019, they were entitled to a margin of 40 bps over the weighted average cost of borrowing for financing Rolling Stock Assets and a spread of 35 bps over the weighted average cost of borrowing for financing Project Assets over the weighted average cost of borrowing.
Indian Railway Credit Rating
They maintain the highest possible credit ratings for an Indian issuer both for domestic and international borrowings. They have received the highest credit ratings from CRISIL – CRISIL AAA and CRISIL A1+, ICRA – ICRA AAA and ICRA A1+, and CARE – CARE AAA and CARE A1+.
The Company also been accorded with Baa2 (Negative) rating by Moody’s, BBB- (Stable) rating by Standard and Poor’s, BBB- (Stable) rating by Fitch and BBB+ (Stable) rating by Japanese Credit Rating Agency that are on par with India’s sovereign ratings.
Indian Railway Finance Limited: Business strategies
- Diversification of borrowing portfolio
- Broaden their financing portfolio
- Continued focus on asset-liability management
- Provide advisory and consultancy services and venture into syndication activities
Indian Railway Finance Ltd – Financial Statements
On the basis of Standalone statement:
|Amount (in INR & Million)|
|Profit After Tax||17,147.96||22,546.61||20,490.86||9,211.71|
Earnings per Equity Share (in Million)
|Amount (in INR & Million)|
|Basic & Diluted||1.83||3.43||3.14||1.41|
Indian Railway Finance IPO – Promoters
The Promoters of this company are:
- THE PRESIDENT OF INDIA
- ACTING THROUGH THE MINISTRY OF RAILWAYS
- GOVERNMENT OF INDIA (“MoR”)
List of Related Parties (Key Managerial Personnel)
- Vijay Babulal Shirode, Company Secretary and Compliance Officer
- Ashutosh Samantaray, Additional General Manager (Finance)
- N.H. Kannan, General Manager (Finance)
- Prasanta Kumar Ojha, General Manager (Finance)
Interest in promotion of the Company
None of their Directors have any interest in the promotion or formation of their Company.
Interests of Promoter in property of their Company
their Directors are not interested in any property acquired by their Company, or in any property that is or proposed to be acquired by it. Further, none of their Directors are interested in any transaction for the acquisition of land, construction of building, or supply of machinery.
Indian Railway Finance IPO Offer Details or Issue Details
|Particulars||No. Of Equity Shares|
|Equity Shares Offered||Up to 1,407,069,000 Equity Shares, aggregating up to Rs.[●]million|
|Fresh Issue||938,046,000 Equity Shares, aggregating up to Rs.[●]million|
|Offer for Sale||Up to 469,023,000 Equity Shares, aggregating up to Rs.[●]million|
|Employee Reservation Portion||Up to [●] Equity Shares aggregating up to Rs.[●] million*|
|Net Issue||Up to [●] Equity Shares aggregating up to Rs.[●] million*|
|QIB Portion||Not more than [●] Equity Shares|
|Non-Institutional Portion||Not less than [●] Equity Shares|
|Retail Portion||Not less than [●] Equity Shares|
|Equity Shares outstanding prior to the Issue||9,380,460,000 Equity Shares|
|Equity Shares outstanding after the Issue||10,318,506,000 Equity Shares|
Indian Railway Finance IPO Issue Object
These are the IPO Issue Objects of the company:
(1) Augmenting their equity capital base to meet their future capital requirements arising out of growth in their business; and
(2) General corporate purposes.
Indian Railway Finance Limited: Key Strength
- Strategic role in financing growth of Indian Railways
- Competitive cost of borrowings based on strong credit ratings in India and diversified sources of funding
- Consistent financial performance and cost plus model
- Low risk business model
- Strong asset-liability management
- Experienced senior management and committed team
Indian Railway Finance IPO – Basis of the Offer Price
The issue price is determined by the company in consultation with the Lead manager on the basis of the following qualitative and quantitative factors.
Qualitative factors are:
- Strategic role in financing growth of Indian Railways;
- Competitive cost of borrowings based on strong credit ratings in India and diversified sources of funding;
- Consistent financial performance and cost-plus model;
- Low risk business model;
- Strong asset-liability management; and
- Experienced senior management and committed team.
Indian Railway Finance IPO – Quantitative Factors
|Basic & Diluted EPS||RONW in %||NAV (Rs.)|
- Price to Earnings (P/E) ratio in relation to Price band of Rs.[●] to Rs.[●] per Equity Share
Indian Railway Finance Limited: Competitive Peers
There are no listed companies in India in the same line of business as that of the Company. Hence, industry comparison in relation to the Company is not applicable.
Indian Railway Finance IPO Lead Managers
|IDFC Securities Limited|
HSBC Securities and Capital Markets (India) Private Limited
ICICI Securities Limited
SBI Capital Markets Limited
Indian Railway Finance IPO Registrar to Offer
|Registrar to the Offer|
|KFin Technologies Private Limited|
(formerly known as “Karvy Fintech
Selenium Tower-B, Plot 31 & 32, Gachibowli
Financial District, Nanakramguda, Serilingampally
Hyderabad 500 032, Telangana, India
Telephone: +91 40 6716 2222
Investor grievance email: email@example.com
Contact Person: M. Murali Krishna
SEBI Registration No: INR000000221
- Statutory Auditor – M/s SPMG & Co.
- Legal Counsel to the Company – Khaitan & Co, Squire Patton Boggs Singapore LLP
- Bankers to the Company – Corporation Bank, State Bank of India, ICICI Bank Limited.
Indian Railway Finance IPO Review by Top 10 Stock Brokers
|Top Stock Brokers Review||Company Reputation||Competitive Edge||Financial Statement||Popularity Index||Promoters Reputation|
Indian Railway Finance IPO Grey Market Premium
The Indian Railway Finance IPO Grey Market Premium price is Rs X, the Kostak rate is Rs X and the Subject to Sauda is X.
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News 1 – IPO ISSUE OPENS SOON [Download Prospectus]
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