Indian Railway (IRFC) Finance Company  is coming out with a Tax Free, Secured, Redeemable bond issue face value 1000 each, aggregating  up to Rs. 4532 Cr.  Issue Open Date 8 Dec 2015 & close as on 21 Dec 2015    Early Close 10 Dec 2015. Issue Fully Subscribe First Day  .    

Product Note

Issue Highlight – 

IssuerIRFC Tax Free Bond
Type of InstrumentSecured, Redeemable, NCD
Issue Open8 Dec 2015
Issue Close21 Dec 2015
Issue Size4532 Cr
Face ValueRs. 1,000
Min. Application Size5 Bonds (Rs.5000) & multiply of 1 Bond thereafter
Max Application Size (for Retail)10 Lacs
Interest Annual
Mode of AllotmentD'mat & Physical Form
RatingAAA
ListingBSE & NSE
Interest on Refund Money5% p.a.
Frequency of Interest PaymentAnnually

Indian Railway  Tax Free Bond Issue Structure –

10 Years15 Years20 Years
For Category I,II, III
Coupon Rate %7.07%7.28%7.25%
Category IV ( Retails)
Coupon Rate %7.32%7.53%7.50%

 

Cheque Details-

Retail Investor  :  ” IRFC Tax Free Bonds 2015 – Escrow Account -R”

NRI

Repatriation basis  :  ” IRFC Tax Free Bonds 2015 – Escrow Account -NR Repat”

Non Repatriation basis  :  ” IRFC Tax Free Bonds 2015 – Escrow Account -NR Non-Repat”

Bankers :   

About Issue

About the Issuer

Indian Railway (IRFC) Finance Company  is a dedicated financing arm of the Ministry of Railways.  Its sole objective is to raise money from the market to part finance the plan outlay of Indian Railways.  The money so made available is used for acquisition of rolling stock assets and for meeting other developmental needs of the Indian Railways.

The borrowing programme of IRFC is guided by the requirements projected by Ministry of Railways.  The company has successfully met the targeted borrowings year after year, through issue of both taxable and tax-free Bonds, term loans from banks/financial institutions and through off shore borrowings.  IRFC also makes use of innovative financial instruments to diversify the debt portfolio and to minimize the cost.  Its contribution to infrastructure build-up in Railways is very significant.  Till 31st March, 2013, Rolling Stock assets- Locomotives, Coaches and Wagons- valued at Rs. 97,482 cr. have been added to the asset base of the Indian Railways with funding assistance from IRFC. IRFC’s funding has support technology infusion in the Railways and has enabled Ministry of Railways to purchase new generation Locomotives from General Motors (USA) alongwith transfer of technology and new generation Coaches from Germany for use in high speed/Shatabdi trains.

IRFC’s share in funding of the most productive high capacity wagons and high horse power locomotives is very significant. Acquisition of high capacity & efficient assets with IRFC funding has gone a long way in increasing traffic output and revenue growth over the years. Around 50% of the revenue earning rolling stock assets operating on the Indian Railways network is funded by IRFC.

Since its inception, IRFC has consistently earned profits and paid dividend adding upto Rs. 1668 crore till 31-03-2012 on a paid up capital of Rs. 500 crore which has been increased to Rs. 800 crore from 2nd June, 2009 and further to Rs. 1,091 crore during 2009-10.  The networth of the Company stood at Rs. 5,699.8 crore as on 30.09.2012. . Dividend payments for the year 2005-06, 2006-07, 2007-08, 2008-09, 2009-10,2010-11 and 2011-12  are Rs. 150 crore, Rs. 160 crore, Rs. 100 crore, Rs. 100 crore, Rs. 100 crore and  Rs. 100 crore respectively and are the highest ever paid by a Railway PSU.The networth of IRFC as on 30-09-2012 stood at 5,699.8 crore

The Company’s performance has been rated excellent for eleven years in a row by the Department of Public Enterprises. Specially worth mentioning is the ranking of IRFC among the top ten Government Undertakings for the last four years in succession. For the years 2001-02, 2002-03 and 2003-04, Company has received Award from the President of India, Prime Minister of India and Vice President of India respectively. For the year 2005-06, 2006-07, 2007-08 and 2009-10. the Company has achieved the Perfect Score of 1. 

Indian Railway Finance Company website link 

Credit Ratings: Domestic:   “CRISIL AAA/Stable” by CRISIL, “CARE AAA” rating by CARE and “[ICRA] AAA” rating by ICRA.

 

Benefit to Investor

  •  The Income by way of Interest on these Bonds is fully exempt from Income Tax as per provision under section 10(15) (iv) (h) of IT act.
  • No TDS
  • Capital Gain Benefit – capital gain arising on the transfer of listed bonds shall be taxed @ 10% without Indexation or @20% with Indexation.

 

Subscription

Cat ICat IICat IIICat IVTotal
Issue Size679.80906.401133.001812.804532.00
8 Dec 15Subscribe3375.023023.962039.292358.0310796.30
No of times4.963.341.801.302.38
9 Dec 15Subscribe3375.023023.272038.792426.5810863.66
No of times4.963.341.801.302.40

 

Allotment

India Railway Finance Company Allotment Details ISIN No, Interest payment date, Script ID, Code, Maturity Date

Tax Free BondIndian Railway Finance Corporation - IRFC-Tranche 1
Issue Open8 Dec 2015
Issue Close 10 Dec 2015 (Early Close)
Issue RegistrarKarvy Computershare Private Ltd
Listing ExchangeBSE
Allotment Date21 Dec 2015
Listing Date28 Dec 2015
Interest Payment DateFirst Interest payment 15 Oct 2015 & subsequently on 15 Apr. of every year (Last interest payment along with the redemption amount)
Face Value1000
Circular Ref. NoBSE -20151223-7
Tranche 1Series 1ASeries 1BSeries 2ASeries 2BSeries 3ASeries 3B
Coupon7.07%7.28%7.25%7.32%7.53%7.50%
For Cat. I, II , IIIFor Cat. IVFor Cat. I, II , IIIFor Cat. IVFor Cat. I, II , IIIFor Cat. IV
Period10 Years15 Years20 Years10 Years15 Years20 Years
ISIN NoINE053 F07793 INE053 F07801 INE053 F07819 INE053 F07827INE053 F07835INE053 F07843
BSE Script 935566935568935570935572935574935576
NSE Script
Maturity21 Dec 202521 Dec 203021 Dec 203521 Dec 202521 Dec 203021 Dec 2035