Indian Railway Finance Corporation (IRFC), valued at Rs 4,633 crore, is set to hit the market with its initial public offer (IPO) on Monday. The IPO’s price band will be of Rs 25-26 per equity share.
IRFC is the finance arm of Indian Railways. It raises financial resources for expansion through capital markets and other borrowings.
At the upper end of the price band, IRFC hopes to raise Rs 4,633 crore, and at the lower end, Rs 4,455 crore. The anchor book opened today, allocating up to 50 per cent of the portion reserved for qualified institutional buyers (QIBs), to build investor confidence on the IPO. This is the first time that a PSU is using the anchor-investor route to raise funds.
In the grey market, IRFC shares clocked trading with a muted premium of Rs 1.60 per share over the issue price. This is the first IPO from a railway non-banking financial company (NBFC).
The IPO of up to 1,78,20,69,000 equity shares comprises 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 of India.
Company filing say up to 50 per cent of the net offer will be reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional buyers and remaining 35 per cent for retail investors. Earlier in April 2017, the Union Cabinet had approved the listing of five railway companies out of which IRCON International Ltd, RITES Ltd, Rail Vikas Nigam Ltd (RVNL) and Indian Railway Catering and Tourism Corporation (IRCTC) have already been listed. IRCTC shares were listed in October 2019 with over 100 per cent listing gains.