Indian Railway Finance Corporation (IRFC), is a Government of India Undertaking under the administrative control of the Ministry of Railways (MoR), was established in 1986 as the dedicated financing arm of Indian Railways. Since inception in 1986, its primary focus has been on sourcing funds, both locally and internationally, at competitive rates. These funds are integral in facilitating the infrastructural development of the Indian Railways. Over the years, the company consistently diversified its borrowing portfolio to meet the evolving needs of the Indian Railways.
IRFC mobilizes funds from domestic and international capital markets to finance the acquisition of rolling stock, project assets, and other capital expenditure needs of Indian Railways and entities under the Ministry of Railways. The company lend funds to MoR, Railway Entities and other Entities having forward & backward linkages with Railways, to fuel their growth plan. In alignment with its long-term vision and national infrastructure development goals, IRFC is now diversifying its lending portfolio by extending funding to various projects that have forward and backward linkages with the Railways.
Its aim is to be one of the leading Financial Service Companies in the country, for raising funds from the capital market at competitive cost for Railway infrastructure augmentation, duly ensuring that the Corporation makes optimum profits from its operations.
Business area of the company
IRFC core business operations encompass the leasing of rolling stock and railway infrastructure assets, in addition to lending to entities having forward and backward linkages. Its primary business is financing the acquisition of rolling stock assets, which includes both powered and unpowered vehicles, for example locomotives, coaches, wagons, trucks, flats, electric multiple units, containers, cranes, trollies of all kinds and other items of rolling stock components as enumerated in the Standard Lease Agreement (collectively, “Rolling Stock Assets), leasing of railway infrastructure assets and national projects of the Government of India (collectively, Project Assets) and lending to other entities under the Ministry of Railways, Government of India.
IRFC’s Operations
- Leasing Operations: At IRFC, the company employ a leasing model to finance the acquisition of rolling stock and project assets for the Indian Railways.
- Lending Operations: The company has provided loans to various companies in Railway sector and entities having forward & backward linkages with Railways. Company is taking several strategic steps to diversify its lending portfolio and started funding for projects other than MoR under its mandate of financing i.e., NTPC Renewable Energy, NTPC etc.
- Borrowing Operations: The company strive to meet its funding needs through diverse channels while seeking to secure the most competitive rates available in the market. To this end, the company acquire funds through avenues such as issuing taxable and tax-exempt bonds, 54EC bonds obtaining term loans from banks and financial institutions, utilising commercial papers and accessing external commercial borrowings. The funding plan of IRFC is carried out with the prime objective to minimize its price of borrowings which in turn will benefit the Indian Railways as it works on a cost plus margin basis.
Awards and Accreditations
2018: Awarded “Mini Ratna Category I” status.
2019: Awarded “Best Growth Performance-Financial Services” and “Best Miniratna in Services” at thePSU Awards 2019, organised by dun & bradstree.
History and Milestones
1988: Commencement of fund raising from the domestic capital market.
1988: Financing the procurement of Rolling Stock Assets by Indian Railways.
1988: Raised loan from Export Import Bank of Japan on behalf of the Ministry of Finance.
1991: Company declared dividend to the GoI.
1993: Declared as a Public Financial Institution under Section 4A of the Companies Act, 1956.
1996: Issue of floating rate notes of USD 70 million in the offshore market.
1996: Public issue of deep discount bonds.
1998: Registered as a NBFC.
1998: Raised term loans from Corporation Bank and Indian Overseas Bank for a tenure of 15 years.
1998: Issue of secured, redeemable, non-cumulative, taxable bonds to Life Insurance Corporation of India for tenure of 15 years.
1999: Issue of secured, redeemable, non-cumulative, taxable bonds in Separately Transferable RedeemablePrincipal Parts (STRPP).
2003: Raised USD 75 million through syndicated foreign currency loan.
2006: Issue of floating rate bonds in the domestic capital market.
2008: Categorized as NBFC-ND-AFC by RBI.
2010: Issuance of secured, redeemable, non-cumulative, taxable bonds for a tenure of 25 years.
2010: Categorized as NBFC-IFC by RBI.
2011: Issue of Euro-Dollar bonds (Regulation S) in the offshore market.
2011: Raised foreign currency term loan from American Family Life Assurance Company of Columbus for a tenure of 15 years.
2012: Raised funds through a public issue of tax - free bonds at a differential coupon rate.
2012: The company entered into a memorandum of understanding dated July 27, 2012 with MoR with respect to the financing of railway infrastructure projects by the company. The MoU sets out the understanding between the parties as regards the leasing by the company to the MoR of the infrastructure assets like railway tracks etc. owned by the company.
2016: Mobilization of Rs 95,000 million through tax free bonds.
2016: Forayed into funding railway projects through institutional finance from LIC.
2018: Central Board of Direct Taxes vide notification dated August 8, 2017 notified that the any bond redeemable after three years issued by the company will be classified as “long-term specified asset” under Section 54EC of the Income-tax Act, 1961.
2018: The Bank of Tokyo-Mitsubishi UFJ Ltd., Mizuho Bank Ltd. and Sumitomo Mitsui Banking Corporation (Singapore branch) sanctioned syndicated loan to the company amounting to JPY equivalent of USD 250 million for a period of 10 years.
2018: Unsecured fixed rate Regulation S green bonds issued by the company amounting to USD 500 million for a period of 10 years.
2019: Set up Euro Medium Term Note (EMTN) Programme for USD 2 billion.
2019: Issuance of Reg S Bonds of USD 500 Million in the EMTN format.
- 2020: IRFC files DRHP with SEBI for IPO
- 2020: IRFC gets SEBI’s approval to raise funds via IPO
- 2022: IRFC raises $500 million via green offshore bonds
- 2022: Indian Railway Finance Corporation inks MoU with IIFCL
- 2022: IRFC raises $500 million via green notes issuance
- 2023: Indian Railway Finance Corporation signs MoU with RITES
- 2024: Indian Railway Finance Corporation reports 34% rise in Q4FY24 net profit
- 2025: IRFC signs MoU with REMCL
- 2025: IRFC emerges as lowest bidder to finance Rs 3,167 crore for Jharkhand mine
- 2025: IRFC secures ‘Navratna Status’ from Government of India
- 2025: IRFC sanctions Rs 200 crore loan for development of Surat Multi-Modal Transport Hub
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