The dedicated market borrowing arm of the Indian Railways will utilize the net proceeds towards augmenting the company’s equity capital base to meet future capital requirements. The Rs 4,634-crore Indian Railway Finance Corporation (IRFC) initial public offer (IPO) is scheduled to open on January 18, becoming the first public issue of the new calendar year 2021. The case will close for subscription on January 20, 2021. According to the red herring prospectus (RHP), up to 178.20 crore shares, comprising a fresh issue of 59.43 crore equity shares and an offer-for-sale of up to 118.80 crore shares. The price band of the problem is in the range of Rs 25-26 per share with a face value of Rs 10 each. According to a trader dealing in pre-IPO and unlisted shares, IRFC shares were traded with just a Rs 1.20 premium over Rs 26 a piece’s issue price in today’s grey market.
Also read: Upcoming IPOs in 2021: LIC, IRFC, Zomato, other public issues on cards; will IPO bull run continue in 2021?
Who can bid how much?
The bids for the issue can be made for a minimum of 575 equity shares and multiples after that. Up to 50 percent of the net issue will be reserved for Qualified Institutional Buyers (QIB), while the company has reserved not more than 35 percent of the problem for retail investors. However, 15 percent of the issue will be reserved for the Non-Institutional category.
Also read: Indigo Paints IPO opens next week as Sequoia Capital, promoter look to trim stake; check details.
IRFC received Sebi’s approval for its public issue on February 25, 2020. The dedicated market borrowing arm of the Indian Railways will utilize the net proceeds towards augmenting the company’s equity capital base to meet future capital requirements arising out of growth in business and general corporate purposes. The shares of IRFC are proposed to be listed on BSE and NSE. DAM Capital Advisors Ltd, HSBC Securities and Capital Markets (India) Private Ltd, ICICI Securities Ltd, and SBI Capital Markets Ltd are the books running lead managers to the offer. At the same time, Kevin Technologies Private Ltd will be the registrar of the issue.
IRFC to benefit from transformation plans of Indian Railways
Abhay Doshi, Founder- of UnlistedArena.com dealing in Pre-IPO & Unlisted Shares, told Financial Express Online IRFC could be the biggest beneficiary of the ongoing expansion and transformation plans of Indian Railways by GOI. It enjoys the benefit of competitive cost of borrowings based on solid credit ratings and diversified earning sources. Asset-liability, stable management, and a low-risk business model make the company more attractive.
According to RHP, IRFC’s primary business is financing the acquisition of Rolling Stock Assets and Project Assets of the Indian Railways and lending to other entities under the Ministry of Railways. Over the last three decades, IRFC has played a significant role in supporting the capacity enhancement of the Indian Railways by financing a proportion of its annual plan outlay.
Get live Stock Prices from the BSE, NSE, and US Market, and the latest NAV and portfolio of Mutual Funds; check out the newest IPO News, Best Performing IPOs, calculate your tax by using an Income Tax Calculator, know the market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter. Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news.
