Indian Railway Finance Corporation IPO opens tomorrow: Here's what you need to know
Indian Railway Finance Corporation (IRFC), a public sector undertaking under the ministry of railways, will open its three-day initial public offering (IPO) for subscription on Monday. IRFC is a dedicated financing arm of the Indian Railways for mobilising funds from domestic as well as overseas markets. Its primary objective is to meet the predominant portion of "extra-budgetary resources" requirement of the Indian Railways through market borrowings at the most competitive rates and terms.
The Union cabinet had approved listing of five railway companies in April 2017. Four of them -- IRCON International Ltd, RITES Ltd, Rail Vikas Nigam Ltd and Indian Railway Catering and Tourism Corp -- have been listed.
Here are key things you should know before subscribing the issue:
1. IRFC has fixed the price band for its public issue at ₹25-26 per equity share and the IPO is expected to fetch ₹4,633.4 crore at the upper end of the price band.
2. It will launch an initial public offering of up to 1,78,20,69,000 equity shares. The IPO comprises a fresh issue of 1,18,80,46,000 equity shares and an offer for sale of 59,40,23,000 equity shares by the government.
3. The issue includes a reservation of equity shares worth ₹50 lakh for subscription by eligible employees. It will constitute up to 13.64% of the post issue paid-up equity share capital of the company.
4. IRFC aims to raise ₹4,455.17 crore to ₹4633.38 crore at a price band of ₹25-26 per share. The company already garnered ₹1,390 crore through anchor book on Friday. The anchor investors include HDFC Trustee Company Ltd, Nippon Life India Trustee Ltd, Government of Singapore, Monetary Authority of Singapore, Kuwait Investment Authority Fund, Kotak Mahindra (International) Ltd, Goldman Sachs (Singapore) PTE, Tata AIG General Insurance Co Ltd and Aditya Birla Sun Life Insurance Co Ltd.
5. The net proceeds from its fresh issue are proposed to be utilised towards for augmenting equity capital base to meet future capital requirements arising out of growth in business; and general corporate purposes.
6. The proceeds of the offer for sale will be received by the selling shareholder, the government of India, and hence, the company will not receive any proceeds from the offer for sale.
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