IRFC retains Rs 1,415 crore at 7.14% through 15-year maturing bonds

Indian Railway Finance Corporation (IRFC) – a dedicated financing arm of the Indian Railways for mobilising funds from domestic as well as overseas capital markets – has raised Rs 1,415 crore through bonds maturing in 15 years at a coupon rate of 7.14 per cent, sources aware of the development said.

 

IRFC was initially looking to raise Rs 3,000 crore, with a base issue of Rs 500 crore and a green shoe option of Rs 2,500 crore. The bonds were rated ‘AAA’ by domestic credit rating agencies CRISIL, ICRA, and CARE. The company received bids worth Rs 4,985 crore from investors but retained only Rs 1,415 crore, as it was expecting lower rates, sources said.

 

 

India’s 10-year government security (g-sec) yield closed at 6.82 per cent on Monday.

 

Last week, REC raised Rs 3,000 crore through the issuance of 15-year bonds at a tight pricing of 7.09 per cent. Additionally, REC also raised Rs 2,901 crore through 5-year bonds at a coupon rate of 7.34 per cent.

 

Market participants noted that IRFC was aiming for rates similar to those at which REC raised funds last week. However, investors—particularly long-term ones—were unwilling to offer such rates, leading IRFC to raise only Rs 1,415 crore.

 

Separately, state-owned National Housing Bank has called for bids from investors on November 14 to raise Rs 5,000 crore, with Rs 2,000 crore as the base issue and Rs 3,000 crore as the green shoe option, through bonds maturing in 10 years. The bonds have been rated ‘AAA’ by domestic credit rating agencies.