IRFC IPO opens for subscription; wise decision to invest, say experts

The initial public offer (IPO) of Indian Railway Finance Corporation (IRFC) opened on Monday for subscription, in the price band of ₹25-26 per share. The three-day initial share-sale IRFC will remain open until January 20 and is expected to fetch ₹4,633.4 crore.

IRFC IPO comprises up to 178.20 crore shares, comprising a fresh issue of up to 118.80 crore and offer-for-sale of up to 59.40 crore shares by the government.

As per experts, it will be a wise decision to invest in the IRFC IPO due to the strategic role of the Indian railways in financing growth. It also has a low-risk business model and lower credit risk.

Set up in 1986, 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.

A total of 5,34,563,007 equity shares have been allocated to 31 anchor investors at an upper price band of ₹26 per equity shares, the company said in a statement. At this price, IRFC has garnered ₹1,398.63 crore from anchor investors on Friday. Anchor investors include DFC 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.

The Union Cabinet had in April 2017, approved listing of five railway companies. Four of them -- IRCON International Ltd, RITES Ltd, Rail Vikas Nigam Ltd and Indian Railway Catering and Tourism Corp -- have been listed.

(With PTI inputs)