State-owned IRFC aims to raise Rs 4,634-crore from the IPO and the price band has been kept at Rs 25-26 per share.
The initial public offering (IPO) of the Indian Railway Finance Corporation (IRFC) opened on January 18 in the price band of Rs 25-26 per share.
The IPO worth over Rs 4,600 crore would close on January 20.
The IPO of the NBFC comprises up to 178.20 crore equity shares of Rs 10 each, including fresh issue of 118.80 crore shares and offer for sale of 59.4 crore equity shares.
As per Zee Business Managing Editor Anil Singhvi, the equity size of Indian Railway Finance Corporation is huge, so the share price will not move quickly. Additionally, since the share price is low, many investors will buy this share. Regarding IRFC strengths, the Market Guru said it is a Government company (parentage is very strong) and it is an AAA rated company.
Singhvi says that the revenue and profit visibility of the company is extremely clear for the next few years. It will keep on earning good profits for years to come. "Basically, IRFC is the financier of Indian Railways," he says.
On Friday, the company raised Rs 1,390 crore from anchor investors.
Established in 1986, the dedicated financing arm of the railways is a public sector enterprise under the administrative control of the Ministry of Railways.
The Non-Banking Financial Company (NBFC) would utilise the proceeds of the IPO for augmenting equity capital base to meet future capital requirements and general corporate purposes.
In April 2017, the government had approved listing of five railway companies. Out of them, four companies - IRCON International Ltd, RITES Ltd, Rail Vikas Nigam Ltd and Indian Railway Catering and Tourism Corp - have been listed.
"IRFC coming up for listing with a Rs 4600 cr+ issue in a price band of Rs 25-26 per share. Anchor book on January 15 and the Main book from January 18-20," Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM) had tweeted earlier.
The issue includes a reservation of equity shares worth Rs 50 lakh for subscription. It will constitute up to 13.64% of the post issue paid-up equity share capital of the firm.
It may be noted that IRFC will not receive any proceeds from the offer for sale and the same will be received by the Centre.
IRFC is the dedicated financing arm of the Indian railways and was established in 1986. It is a public sector enterprise under the administrative control of the Ministry of Railways.
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