IRFC (Indian Railway Finance Corporation) Share Price

Indian Railway Finance Corporation Ltd

Introduction

Indian Railway Finance Corporation Ltd (IRFC) is a prominent public sector enterprise established to finance the acquisition of assets for the Indian Railways. Incorporated on December 12, 1986, IRFC operates under the administrative control of the Ministry of Railways, Government of India. The company plays a crucial role in mobilising funds from both domestic and international markets to support the growth and development of Indian Railways.

Key milestones

• 1986: Incorporated as a Public Limited Company and received its Certificate of Commencement of Business on December 23, 1986.
• 1993: Classified as a Public Financial Institution by the Ministry of Corporate Affairs.
• 1998: Registered with the Reserve Bank of India (RBI) as a non-banking financial institution.
• 2008: Classified by the RBI as a non-deposit accepting asset finance non-banking financial company.
• 2010: Reclassified as an NBFC-ND-IFC by the RBI.

Leadership

The company is managed by Usha Venugopal, who serves as the Managing Director. The leadership team is responsible for steering the company towards achieving its strategic goals and maintaining its financial health.

Business model and operations

Primary business activities

IRFC's principal business involves borrowing funds from financial markets to finance the acquisition and creation of assets, which are then leased to Indian Railways. The company primarily focuses on:

• Rolling stock assets: Financing locomotives, coaches, wagons, and other railway vehicles.
• Railway infrastructure: Leasing infrastructure assets and national projects.
• Lending: Providing financial support to other entities under the Ministry of Railways.

Leasing model

IRFC follows a financial leasing model with a typical lease period of 30 years, divided into a primary period of 15 years and a secondary period of another 15 years. During the primary period, the principal amount and the weighted average cost of borrowing are payable. The secondary period involves a nominal rate, subject to revision.

Financial performance

• Revenue: Indian Railway Finance Corporation (IRFC) posted total revenue from operations of ₹6,722.83 crore for Q4FY25. This figure reflects a year-on-year growth of 3.8%.
• Net profit: For the fourth quarter of FY25, IRFC reported a net profit of ₹1,681.87 crore, marking a 2.1% decrease year-on-year.
• Operating profit: - Operating profit: Taking into account IRCF’s finance costs, total expenses, PAT, and revenue from operations, its estimated EBITDA for Q4FY25 stood at ₹6,677 crore. This demonstrates the company’s efficient business model. The operating margin remains exceptionally strong, near 99%, underscoring IRFC’s position as a low-cost, high-efficiency financial institution serving the Indian Railways.
• Operating cash flow: As of March 2025, IRFC generated a net cash flow from operating activities of ₹8,230 crore, up from ₹7,914 crore in March 2024. This substantial operating cash flow highlights the company’s strong ability to convert its profits into cash, ensuring ample liquidity for ongoing lending and investment activities. The healthy cash generation also supports IRFC’s capacity to fund future railway projects and maintain financial stability.

Market performance

• Share price: As of August 2024, the share price of IRFC is approximately Rs. 180.63, down from its record high of Rs. 229 in July 2024.
• Market capitalisation: The company's market cap is around Rs. 237,114.97 crore.
• Dividend: IRFC declared a final dividend of Rs. 0.7 per share, with the record date set for August 22, 2024.

Strategic initiatives

Gati shakti multi-modal cargo terminal (GCT) policy

Launched on December 15, 2021, this policy aims to develop additional terminals for handling rail cargo, enhancing IRFC's role in infrastructure development.

Collaborations and partnerships

IRFC has entered into a Memorandum of Understanding (MoU) with RITES to explore mutual interests in railway projects. This collaboration aims to bolster the financing framework for railway infrastructure projects.

Shareholding and governance

• Ownership: As of March 31, 2023, 86.36% of IRFC's equity share capital was held by the President of India through the Ministry of Railways, with the remaining 13.64% held by the public.

• Governance: The company adheres to robust governance practices, ensuring transparency and accountability in its operations.

Indian Railway Finance Corporation Ltd plays a vital role in the financial ecosystem of Indian Railways, providing essential funding for asset acquisition and infrastructure development. With a strong financial performance and strategic initiatives, IRFC continues to support the expansion and modernisation of Indian Railways, contributing significantly to the nation's transportation infrastructure.