INDIAN RAILWAY FINANCE CORPORATION LIMITED IPO

One of the awaited IPO, after the immense success we saw with IRCTC, for the month of January 2021 is INDIAN RAILWAY FINANCE CORPORATION LIMITED.

The Company is a public sector class and has been incorporated in the year 1986. Its core operations includes the financing the acquisition of Rolling Stock Assets and Project Assets of the Indian Railways and lending to other entities under the Ministry of Railways (MoR).

Over the last three decades, they have played a significant role in supporting the capacity enhancement of the Indian Railways by financing a proportion of its annual plan outlay. Considering that it is a wholly owned Government Entity and has a substantial stake in the expansion of Indian Railways it promises strong management.

IPO Opens on	IPO Closes on	Issue Type	Issue	Offer for Sale comprises	Face Value per share	Price Band	Minimum Order Quantity	Listing will at
13-Jan-20	15-Jan-20	Book Built Issue IPO	Up to 1,78,20,69,000 Equity Shares, aggregating up to Rs 4633.38 Crore of which Fresh Issue 11,88,04,60,000 Shares Equity Shares, aggregating up to Rs 3088.92 Crore	Up to 59, 40, 23,000 Equity Shares, aggregating up to Rs 1546.44 crore				BSE & NSE

Objective of issue IPO

As per the prospectus, the objective described for the Net Proceeds are proposed to be utilized towards funding of the following objects:

(1) Augmenting the Company’s Equity Capital Base to meet their future capital requirements arising out of growth in the business; and

(2) General corporate purposes

In addition, they expect to achieve the benefits of listing on the Stock Exchanges and enhancement of the Company’s brand name and eventually creation of a public market for the Equity Shares in India.

Company Financial Records

In accordance with the SEBI ICDR Regulations, the audited financial information of the Company for Fiscals

2017, 2018 and 2019 and for the six month period ended September 30, 2019 is available on their website at

www.irfc.nic.in/investors/.

Source DRAFT RED HERRING PROSPECTUS, Dated: January 16, 2020

Some of the quantitative factors which may form the basis for computing the Issue Price are as follows:

1. Basic and Diluted Earnings per Share (“EPS”), as adjusted for changes in capital:

As per Restated Financial Statements:

                                           *Not annualized

Notes:

(1) Weighted average = Aggregate of year-wise weighted EPS divided by the aggregate of weights i.e.

      (EPS x Weight) for each year / Total of weights

(2) The figures disclosed above are based on the Restated Financial Statements of the Company.

(3) Earnings per Share (`) = Profit for the period before Other Comprehensive Income attributable to

      Equity shareholders / Weighted Average No. of equity shares

(4) Basic EPS and Diluted EPS calculations are in accordance with Ind-AS 33 ‘Earnings per Share’,

      Notified under Section 133 of Companies Act, 2013 read together along with paragraph 7 of the

      Companies (Accounts) Rules, 2014.

(5) The above statement should be read with Significant Accounting Policies and the Notes to the

      Restated Financial Statements as appearing in Annexure VI.

2. Price Earnings Ratio (P/E) in relation to the Price Band of ` [●] to ` [●] per Equity Share

              Industry Peer Group P/E ratio

              Not applicable, as there are no listed entities similar their line of business and operating profile.

3. Return on average Net Worth (“RoNW”)

    As per Restated Financial Statements of the Company:

Notes:

• Weighted average = Aggregate of year-wise weighted RoNW divided by the aggregate of weights

i.e. (RoNW x Weight) for each year / Total of weights

• Return on average Net Worth (%) = Net Profit for the relevant year/period as a percentage of average of the Company’s Net worth as of the last day of the relevant year/period and the Company’s Net worth as of the last day of the immediately preceding year/period.

4. Net Asset Value per Equity Share of face value of `10 each

(i) Net asset value per Equity Share as on September 30, 2019 is `21.37.

(ii) Net asset value per Equity Share as on March 31, 2019 is `19.81.

   After the Issue:

   At the Floor Price: [●]

   At the Cap Price: [●]

   Issue Price: [●]

   Notes:

   Net Asset Value per Equity Share=Net worth as per the restated financial information

   Number of equity shares outstanding as at the end of year/period.

   Net worth means the aggregate value of the Equity Share Capital of the Company and Other Equity.

Details of Company Promoters

The Promoter of the Company is the President of India, acting through the MoR.

Company Contact Information

IRFCL has appointed Vijay Babulal Shirode, Company Secretary of the Company as the Compliance Officer for the Issue. The Team can be contacted in case of any pre- Issue or post- Issue related problems at the following address:

Indian Railway Finance Corporation Limited

UG-Floor, East Tower,

NBCC Place, Bisham Pitamah Marg,

Pragati Vihar, Lodhi Road,

New Delhi – 110 003

Tel: +91 (11) 2436 8068 | Fax: +91(11) 2436 9770 | Company Website: http://www.irfc.nic.in                                                      

IPO Registrar

• KFin Technologies Private Limited (formerly known as “Karvy Fintech Private Limited”)

IPO Lead Manager(s)

• IDFC Securities Limited
• HSBC Securities and Capital Markets (India) Private Limited
• ICICI Securities Limited
• SBI Capital Markets Limited

How to apply IPO/

IPO FAQs

• The hyperlink of the first article can be put here

FUN FACT-

1. In the year 2018 The Indian Railways was declared to be the largest rail network in Asia, running approximately 13,452 trains every day to transport approximately 22.70 million passengers/ day.
2. The Indian Railways has planned to borrow 2.50 trillion from IRFC to fund its proposed capital expenditure from Fiscal 2016 to Fiscal 2020 (Source: Ministry of Railways).
3. Check their prospectus for more such interesting facts https://www.sebi.gov.in/filings/public-issues/jan-2020/indian-railway-finance-corporation-limited_45739.html

BIBLIOGRAPHY

• DRAFT RED HERRING PROSPECTUS, Dated: January 16, 2020