Indian Railway Finance Corporation Ltd. posts all-time high revenue

Indian Railway Finance Corporation Ltd. posts all-time high revenue
and profit numbers for FY21

·         For Q4FY2021 IRFC’s PAT grew by more than 126% on YoY basis to stand at Rs. 1,482.55 crore vs. Rs. 654.63 crore reported in Q4FY2020

·         IRFC posted profit growth of 38.34% to Rs. 4,416.13 Crore for the fiscal ended 31st March, 2021 from Rs. 3,192.06 Crore for fiscal ended 31^st March, 2020

·        IRFC’s total revenue from operation for Fiscal 2021 stood at Rs. 15,770.47 crore as against Rs. 13,421.09 crore for Fiscal 2020

Indian Railway Finance Corporation Limited (“IRFC” or the “Company”) the dedicated market borrowing arm of the Indian Railways posted profit growth of 126% on YoY basis for Q4 FY 2020-21 to stand at Rs. 1,482.55 crore vs. Rs. 654.63 crore reported in Q4FY2020.

The net profit for FY2020-21 grew by 38.34% to Rs. 4,416.13 Crore as against Rs. 3,192.06 Crore for the corresponding financial year ended 31^st March, 2020. The total revenue from operation grew by 17.50% on YoY basis for the same period to stand at Rs. 15,770.47 Crore.

The annual disbursement for IRFC grew by 46.19% on YoY basis from Rs. 71,392 crore in FY 2019-20 to Rs. 1,04,369 crore for the FY 2020-21. The Assets Under Management (AUM) for FY2020-21 stands at Rs. 3,60,079  crore as against Rs. 2,66,137 crore registering a growth of 35.29% on YoY basis.

The capital adequacy ratio of IRFC continues to remain strong at 415.85% for FY 2020-21 as against 395.39% for FY 2019-20. The Company continues to raise funds at the most competitive rates and terms both from the domestic and overseas financial markets which has helped to keep its cost of borrowing low.

Corporate Social Responsibility remains to be a focal area for IRFC as the company spent Rs. 93.44 crore for FY 2020-21 as compared to Rs. 49.45 crore for FY 2019-20.  

Commenting on the financial results, Shri Amitabh Banerjee, Chairman and Managing Director, IRFC, said, “IRFC continued to show strong growth momentum both in terms of revenue and profit during the financial year driven by the massive investment outlay of Indian Railways which is on an expansion and modernization drive. There will be sustained growth in revenue and profitability going forward as a major portion of the funding requirement of Indian Railways is to be met through IRFC.”

IRFC mop up Rs 1,375 crore from

IRFC mop up Rs 1,375 crore from domestic market through 20-year bond at 6.8 per cent

 

The Indian Railway Finance Corporation (IRFC), the dedicated financing arm of the Indian Railways, on Friday, raised Rs 1,375 crore through issuance of domestic bonds.

 

The fund has been raised at 6.80 percent coupon rate with 20-year maturity which is about 18 basis points lower than the benchmark par yield Government security as per yesterday’s close in CCIL.  This is one of the rare occasions when a top-rated government issuer has pierced the sovereign curve in the domestic market with such a huge margin. This shows the confidence reposed by the large debt investors in the country for IRFC papers scotching the speculations in certain quarters about rising cost and heightened risk perception post IPO and dilution of Government stake.

“The bond issuance received a very good response from the investors comprising long term / ultra-long-term investors including primarily the provident funds. The issue was oversubscribed by six times as compared to the base issue size of Rs 500 crore,” said a company statement.

 

The company has decided to retain a sum of Rs.1375 crore, based on the borrowing target mandated by the ministry of Railways for the current fiscal, it further said.

 

With the current issuance, the cumulative fund raising through 20-year bond issuance in the domestic capital market during the current fiscal has touched around Rs.13,970 Crore. The corporate bonds in the domestic market are liquid for tenor up to 10 years. Such large issuances by IRFC has deepened the corporate bond market for long / ultra-long tenors and has set a new benchmark yield curve for pricing similar issuances in the future.

IRFC has been playing a critical role in the growth, expansion and modernization of Indian Railways.

 

The company was assigned an annual borrowing target in excess of Rs. 1 trillion during the current fiscal. The CAGR of yearly disbursements by IRFC to Indian Railways over the last 6 years has logged a level of around 45.70%.

 

The annual borrowing target has been successfully met through borrowing from diversified sources both from domestic and overseas market including highest single year external commercial borrowings of around USD 4.08 billion. The external commercial borrowings include USD 750 Million overseas bond issuance for a tenor of 10 years in the Reg-S / 144A format under the Company’s Global Medium Term Note Programme (GMTN) and borrowing of USD 3 Billion through foreign currency loan from a leading public sector bank for tenor ranging from 7 to 10 years. The 10 year USD 750 Million bond issuance got overwhelming response with over subscription by almost 4 times. Despite the fact that the Company’s bond issuances are not eligible for inclusion in the EMBI Index post IPO, it managed to get the tightest pricing possible of 2.80% (167.5 bps over 10 year UST). The pricing obtained by IRFC is a departure from the usual market convention of premium over the secondary market yield. Bonds issued by IRFC were priced at 7 to 10 bps lower than its secondary market yields of its own listed papers.