Indian Railway Finance Corporation
Established in 1986 as the dedicated financing arm of Indian Railways for mobilizing funds from domestic as well as overseas Capital Markets. IRFC falls under Mini Ratna 1 category and is a Schedule ‘A’ Public Enterprise under administrative control of Ministry of Railways, Govt. of India. It is also registered as Systemically Important Non–Deposit taking Non-Banking Financial Company and Infrastructure Finance Company with Reserve Bank of India.
Key Business
- Leasing– Companys follows a leasing model to finance the rolling stock assets and project assets of Indian Railways. The lease period is usually of 30 years.
- Lending– IRFC also engages in lending activities and have provided funds to various companies in Railway sector like Rail Vikas Nigam Limited (RVNL), Konkan Railway Corporation Limited.
- Borrowing– IRFC has been seeking to meet its funding requirements from various sources to extract the lowest possible pricing from the markets.
Shareholding Pattern
- Public Group
- Promoter Group
Financial Summary
| Particulars | March 2023 | March 2022 | March 2021 |
| Sales | 23,892 | 20,299 | 15,771 |
| Expenses | 134 | 123 | 113 |
| Operating Profit | 23,758 | 20,177 | 15,657 |
| OPM % | 99% | 99% | 99% |
| Profit after tax | 6,337 | 6,090 | 4,416 |
| EPS in Rs | 4.85 | 4.66 | 3.38 |
Synopsis of Financials
- IRFC’s asset under management stood at INR 4.67 lakh crores as on 31st March ‘23, with 98.73% pertaining to Indian Railways and 1.27% for loan to RVNL and IRCON.
- IRFC’s revenue has grown at a rate of 17.7% from INR 20,298 crores to INR 23,891 crores, and the profit for the financial year 22-23 is INR 6,337 crores.
Final Outlook
IRFC is moving towards lending to other ancillary railway related projects, with a project signed to the Haryana State Government, and there also chances that there may be some additional projects in the pipelone too. IRFC faced a one-time adjustment in the WACC calculation, which impacted the profitability for the current quarter. Moreover, company previously in its concalls mentioned that it has plans to do capex upto 10 lakh crores by 2030. IRFC reported a 9% decrease in net profit of ₹1,549.87 crore for the July–September quarter of fiscal 2023–24 (Q2FY24) on Thursday, November 2. This is in contrast to ₹1,714.28 crore for the same period the previous year. In comparison to ₹5,809.8 crore during the same period last year, the revenue generated by operations for the Indian Railway PSUs in the second quarter of the current fiscal year was ₹6,766.32 crore, representing a 16 percent increase. In addition, the business announced an interim dividend of ₹0.8 for each equity share of ₹10. November 10, 2023, has been decided upon as the official record date. IRFC announced a total dividend of ₹1,960.28 crore in the April-June quarter that before, equivalent to 30.93 percent of profit after taxes for FY 2022–2023.
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