IPO of IRFC is On Tracks, arriving on Monday.

IPO Updates 23 February 2021 10:03:AM

The initial public offer (IPO) of the Rs 4,634-crore Indian Railway Finance Corporation (IRFC) is scheduled to open on January 18, becoming the first public issue of the new calendar year 2021. On January 20, 2021, the issue will close for the subscription. The issue is up to 178.20 crore shares according to the red herring prospectus (RHP), comprising a new issue of 59.43 crore equity shares and an offer-for-sale of up to 118.80 crore shares. The price range of the issue is between Rs 25-26 per share with a nominal value of Rs 10 each.

Important details about the IPO of IRFC:- 

IRFC shares were seen trading on the grey market today with only Rs 1.20 premium over the issue price of Rs 26 each, according to a trader dealing in pre-IPO and unlisted shares.

On 25 February 2020, IRFC obtained approval from Sebi for its public issuance. Indian Railways' dedicated market borrowing arm will use the net proceeds to expand the equity capital base of the corporation to meet potential capital needs resulting from growth in revenue and general corporate purposes. It is suggested that IRFC shares be listed on the BSE and NSE. The book running lead managers for the bid are DAM Capital Advisors Ltd, HSBC Securities and Capital Markets (India) Private Ltd, ICICI Securities Ltd, and SBI Capital Markets Ltd. Although the registrar for the issue will be KFin Technologies Private Ltd.

For a minimum of 575 equity shares and multiples thereafter, bids for the issue can be made. The Qualified Institutional Buyers (QIB) will be allocated up to 50 percent of the net issue, while the company has reserved no more than 35 percent of the issue for retail investors. Nevertheless, 15 percent of the issue would be reserved for non-institutional citizens.

Valuation & Recommendation

IRFC plans to increase its financing portfolio by funding Project Assets such as decongestion of the railway network, expansion of the existing network, and future requirements under the public-private partnership model. 

In the future, the company also plans to expand to forward and backward linkages to the railway sector and become a holistic infrastructure financing company that will benefit from the proposed GoI investments, budgetary allocations, and expansion of the railway network by opening up to the private sector.

Important dates to remember for IPO: 

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Source:- Financial express.