Indian Railway Finance Corporation Ltd. share price target

We interacted with Indian Railway Finance Corporation (IRFC) management to get their perspective on asset growth, income recognition, margins, and other business aspects. IRFC management reiterated their stance on strong AUM growth (Q3FY21 AUM grew 26.8% YoY) and follows increased capital outlay by the Ministry of railways. Superior credit ratings and diversified borrowing mix saw the cost of borrowings reduce further (9MFY21 marginal cost of borrowings at 6.4%), and thus retain margins at 1.4% (annualized for FY21). Exposure to sovereign has attributed to NIL NPA and excessively high capital-adequacy. Revenue/earnings growth thus have remained healthy (Q3FY21...

Internet Ticketing The Company is the only entity authorized by Indian Railways to offer railway tickets online through its website and mobile application. The Company currently operates one of the most transacted websites in the Asia-Pacific region with a transaction volume of more than 31.4mn per month and 8.25 lakhs tickets booked per day in FY20. The main objective behind the introduction of the internet ticketing was that instead of requiring passengers to be physically present at...

30 years (primary & secondary period of 15 years) During the primary and secondary lease periods, the full value of assets, including interest is recovered from the MoR...

Indian Railway Finance Corporation Limited - IPO Note Issue Snapshot: Issue Open: Dec 21 Dec 23, 2020, Price Band: Rs. 313 315, Issue Size: 9,523,345 eq shares (Fresh issue 2,698,413* + Offer for sale of 6,824,933 eq sh), Issue Size: Rs. 298.1 -300.0 cr Reservation for: QIB upto 50% eq sh Non Institutional atleast 15% eq sh Retail atleast 35% eq sh, Face Value: Rs 5, Book value: Rs 89.87 (Sep 30, 2020), Bid size: - 47 equity shares and in multiples thereof

value Rs. 10 each, (Comprising of fresh issue of 1,18,80,46,000 Equity Shares* (Rs. 3089 cr.) and Offer Employees Reserve for Sale of 59,40,23,000 Equity Shares* (Rs. 1544 cr.) by Total...

IRFC (registered as NBFC) is wholly owned by GOI and administered through the Ministry of Railways (MoR). IRFC is a market borrowing arm of Indian railways and is primarily in the business of leasing operation and financing of project assets. In FY20, AUM of IRFC grew by 32.4% YoY and disbursement by 35.9% YoY. IRFC saw a strong growth during FY20, NII grew at 16.2% vs 9.2% in FY19, PPoP by 14.8% vs 9.9% in FY19, PAT saw a strong growth of 49.2% vs 6.9% in FY19 as it is not required to pay MAT tax. As a borrowing arm, IRFC financed 48.2% of Capex of Indian railways through various sources of funding from market. At upper price band, IPO is priced at a P/E of 7.6x and P/BV of...

Incorporated in 1986, Indian Railway Finance Corporation Limited (IRFC) is a dedicated market borrowing arm of Indian Railways. Their primary business is financing the acquisition of rolling stock assets, which includes both powered and unpowered vehicles. Outlook & Valuation: IRFC has posted strong growth in operating income of 20.7% CAGR between FY18-20 while net profits

IRFC has posted strong growth in operating income of 20.7% CAGR between FY18-20 while net profits have grown at a CAGR of 26.3% during the same period. Company is unlikely to face any asset quality issues given the fact that the company caters to the Government of India. At the higher end of the price

IPO NOTE

Indian Railway Finance Corp (IRFC), acting through the Ministry of Railways (MOR), Government of India is a dedicated borrowing arm of the Indian Railways. Healthy asset growth, diversified borrowing mix, regulated lending margins, and lean cost structure are characteristics unique to IRFC, a PSU NBFC. This coupled with NIL NPA and robust capital adequacy (400%+ CAR), is a perfect recipe for superior returns. With ~Rs15tn of capital outlay towards infrastructure development by the Indian Railways till FY25, IRFC offers a play on the fast-growing railway infrastructure. On the valuation front, the IPO is priced at 1x H1FY21 ABV (at the higher end of the price band). In our...

Indian Railway Finance Corporation (IRFC) is wholly-owned by the Government of India and acts through the Ministry of Railways (MoR). It is registered with the Reserve Bank of India (RBI) as a Non-Banking Finance Company (NBFC) under the category of an Infrastructure Finance Company. The primary business of IRFC is financing the acquisition of rolling stock assets, which includes both powered and unpowered vehicles such as locomotives, coaches, wagons, trucks, flats, electric multiple units, containers, cranes, trollies of all kinds and other...

In FY20, IRFC had financed 76% of the rolling stock purchased and leased to the MoR (Ministry of Railways). IRFC's total revenue from operations increased by 19.3% from 9207.9 crore in FY18 to 10987.4 crore in FY19 and by 22.2% to 13421.9 crore in FY20, and was 7384.8 crore in 1HFY21. In FY18, FY19, FY20, and 1HFY21, net profit stood at 2001.46 crore, 2139.93 crore, 3192.09 crore and 1886.84 crore, respectively....