IRFC IPO Date, Review, Opportunities
Today we are going to talk about IRFC (Indian Railway Finance Corporation) bringing its IPO.
IRFC is issuing about 140 crore shares in this IPO, out of which 93.8 crore shares will be issue through the IPO and 46.9 million shares will be OFS (Offer for sale).
If you do not know the difference between the IPO and OFS (Offer for sale), then in the short term, when the company raises money through IPO, then that money goes to the company, which the company uses to pay its loan.
If the same company raises money through OFS (Offer for sale), then the money goes to the shareholders who are selling their shares in OFS (Offer for sale).
IRFC is the ONLY stake government company. IRFC holds the entire 100% share of the government and IRFC is control by the Minister of Railways.
So in this IPO of IRFC, there is some violence of OFS (Offer for sale), in which the government will raise money by selling its stake and the money will go directly to the government and not to the company.
The money that IRFC will raise through the same IPO will be given to IRFC, which the company wants to use for its business growth.
IRFC currently has a total of 938 crore shares, which is own by the government.
IDFC Securities, HSBC Securities, ICICI Securities, SBI Capital Markets These are the lead managers who will manage the IPO of IRFC.
IRFC was started by the government in 1986. IRFC is Non Banking Finance and Company Infrastructure Finance Company. IRFC is a finance company of Indian Railways whose job is to fulfill the capital requirements of Indian Railways.
The main task of IRFC is to arrange money at the lowest rate from the financial market and to fulfill the finance requirement of Indian Railways, IRFC finances all the projects of Indian Railways.
There is a big role of finance and capital requirement in any business, then IRFC has a big role in the expansion of Indian Railways.
In the IRFC railway sector which also provides financing to different sectors like rail tail, Konkan Railway Corporation Limited, Rail Vikas Nigam Limited, Pipavav Railway Corporation Limited.
IRFC is a governance company, so the government gives a lot of money to it almost every year, as well as IRFC raises a lot of money through taxable bonds and tax free bonds. IRFC also takes money from LIC.
The biggest opportunities for IRFC is that there is monopoly in their market. Any finance provide to Indian Railways is mainly done from IRFC.
The more expansion Indian Railways will work on, the more IRFC will benefit because when Indian Railways expand, it will require capital and that capital will be met by IRFC.
IRFC gets full support of Ministry of Railways in its business, which reduces its risk of business model significantly.
As far as financials are concerned, IRFC’s performance has been quite good. IRFC’s revenue is growing at a compound rate of 10% every year and profit is growing at a compounded rate of 24% which is also a positive point for IRFC.
IRFC IPO dates not yet declared.