IRFC planning for an IPO by April, eying Rs.1000 Cr

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Bhubaneswar:  Indian Railway finance Corporation ( IRFC) an SPV under the Indian Railways is planning to hit the Indian equity market by the 1st quarter of the next fiscal through an Initial Public Offer (IPO). Through the IPO the PSU plans to raise abut Rs. 1000 Crore by offloading 15% of the government’s stake.


“ The government has already cleared the proposal and we are planning to go for the IPO by the 4th quarter of the current fiscal or the 1st quarter of the next fiscal. We are currently readying the Draft Red Herring Prospectus for the IPO” said Mr. S.K. Pattnayak, Managing Director of the IRFC.


It may be noted that IRFC is one amongst four national institutions (NHAI, REC, PFC) authorised by the Ministry of Finance that can issue 54 EC Bonds Capital Gains bonds.  IRFC has launched the 54 EC Bonds issue on November 10, 2017. IRFC is fourth entity to be authorized by Ministry of Finance to issue such bonds. The Bonds issued have benefits have benefits under Section 54 EC of the Income Tax Act, 1961. These bonds have a lock in of three years and presently yielding a interest of 5.25% p.a. A person who has received capital gains in a year may invest in these bonds and can save the tax on capital gains. An investor can invest maximum up to Rs. 50 lakhs in these bonds during a financial year.


An investor can invest minimum of Rs. 20,000 (and in multiples of Rs. 10,000 thereafter) with a maximum of up to Rs. 50 lakh in these bonds during a financial year. The lock in period is 3 years. Investors can apply in both physical and demat forms. Nomination facility is available.  IRFC is aiming to raise more than Rs. 500 crore Green Shoe option to retain oversubscription.


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