Financial Insights

IRFC to raise $1.1 billion from Japanese lenders

Indian Railway Finance Corporation (IRFC) is set to raise $1.1 billion (around Rs 8,440 crores) from Japanese lenders. Managing Director of IRFC, Amitabh Banerjee, has confirmed the plan.

Mizuho Bank, MUFG and Sumitomo Mitsui Banking Corp are the lenders that are likely to sign this agreement. The loan is said to be used for funding green initiatives of Indian Railways. Indian companies were facing delays in international fundraising due to geopolitical tensions, but now the process has been resuming, although the fact was denied by Mr. Banerjee.

The loan is said to be raised in two phases: $400 million as a 7-year loan and the $700 million as a 10-year loan. The loans will be priced after a mark-up over the Tokyo Overnight Average Ratio (TONA), a Japanese benchmark rate gauge.

The Indian Railways is working towards becoming the world’s largest green railways in the world. The Indian government is working towards reducing omissions and the railways are also working towards the same objective. IRFC, which is the railways’ main financier, plays an important role towards this mission.

The share of IRFC currently trades around Rs 21.75 per share, a price which it has been stuck in for nearly 2 weeks, a price so low which the company hadn’t touched since June 2021.

Highlight by Aman Agarwal.

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