IRFC IPO may hit market this month, first by any public sector by NBFC
By MYBRANDBOOK
A first by a non-banking financial company (NBFC) in the public sector, Indian Railway Finance Corporation (IRFC) initial public offering of about Rs 4,600 crore may hit the markets later this month.
"In all probability it (IPO) will be by the third week but, if the market is not okay then we can go to the first or second week of January also," said Amitabh Banerjee, Chairman and Managing Director, IRFC.
The company, the dedicated financing arm of the Indian Railways, will be going for the anchor investment also.
"The government is planning to have anchor investors in place for this IPO," he further added.
In January 2020, IRFC filed draft papers for its IPO.
The IPO is likely to be worth around Rs 4,600 crore, as per the market sources.
The CMD, on reasons for bringing the anchor portion, added that it is a confident market and the anchor investors would be assured of the fact that they will be able to get the desired proportion of issuance without regular bidding.
"They will be able to get the amount that they want to invest in IRFC without going for the bidding route. Also, it will give a lot of confidence to other investors in the market who are sitting on the fence," he said.
"We are the first NBFC in the PSU sector that is going public for the first time and we shall be paving the way for others," he added.
On plans to utilise the funds mopped up from the offer, he added that 10 percent of the issuance will go to the company's balance sheet and that will increase its net worth and this the firm will be using for raising more money from the market.
He further said that this will add to the company's capability to explore the market further and garner more funds from the market which is the order of the day because the government is in need of funds for its capex expansion outlay requirements.
"Therefore 10 per cent will come to my balance sheet and 5 per cent will go to the government of India's exchequer," he added.
COVID-19 has now come as a "blessing in disguise for us" as the market is flushed with funds and investors are looking to invest in safe havens.
"Indian Railway Finance Corporation happens to be one of the safest havens as far as investors are concerned," he added further.
Banerjee is hopeful that the IPO will be one of the landmark issuances of the fiscal.
"I hope that it will be one of the landmark issuances in this fiscal which augurs well for the other issuances that are coming forward for the government of India in this fiscal," the CMD said.
The book running lead managers to the issue are DAM Capital Advisors, HSBC Securities and Capital Markets, ICICI Securities and SBI Capital Markets.
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