The Indian Railway Finance Corporation (IRFC)'s initial public offering (IPO) will open on Monday, making it the first IPO of this year. The IPO will raise Rs 4,634 crore for IRFC and will close on January 20.
The aim behind this IPO is to augment the company's equity capital base to meet future growth requirements and general corporate purposes.
IRFC, the dedicated market borrowing arm of the Indian Railways, was incorporated in 1986 and is a public-sector enterprise which is completely owned by the Government of India. IRFC is the first non-banking financial company (NBFC) in the public sector which is going public.
The company is registered with the Reserve Bank of India (RBI) as an NBFC and is classified under the category of an 'Infrastructure Finance Company' of the Reserve Bank of India Act.
Things to know:
1. IRFC IPO lot size: A single lot will comprise 575 shares worth Rs 14,950,whereas a retail-individual investor can apply for up to 13 lots which will hold 7,475 shares worth Rs 1,94,350.
2. Price band: The shares will be issued at a price band of Rs 25-26 per share with the face value of Rs 10 each.
3. Timeline: IRFC share allotment is likely to be finalised on January 25, according to brokerages,while the listing is expected to happen on January 29.
4. Allocation and refund: Shares allocation and refund will be managed by KFin Technologies Private Limited. The company is the registrar of the IRFC IPO.
5. Amount raised from anchor investors: IRFC had raised Rs 1,398.63 crores from 31 anchor investors before the IPO.
6. Lead Book Running Managers: The lead book running managers of the issue are DAM Capital Advisors, HSBC Securities and Capital Markets (India), ICICI Securities and SBI Capital Markets.
7. Net Profit: IRFC had posted a net profit of Rs 3,192 crore for the year ended March 2020 and as of September 30, 2020, the company's assets under management was at Rs 2.78 lakh crore.
8. How to apply: You can apply for the IPO online using UPI or via a bank account. For applying offline, you can take the help of stockbrokers.
9. Background: The company received the approval for its public issue on February 25, 2020 by the Securities and Exchange Board of India (SEBI).
10. IRFC's primary business: The company finances the acquisition of rolling stock assets and project assets of the Indian Railways and lending to other entities under the Railways.