What is the Future of IRFC?

Background:

Indian Railway Finance Corporation Limited(IRFC) is subsidiary of Indian railways. It was founded in December 12,1986 with the objective to finance Indian Railways through raised capital from domestic & foreign markets.

IRFC TAX FREE BONDS 2016 Tranche II review
IRFC (Indian Railway Finance Corporation)

Over the last three decades, IRFC has assisted Indian Railways to expand by providing sufficient financial support. The money is used to build/maintain infrastructure for freight cars, passenger coaches and wagons.

Since its establishment to 2018, it has provided INR 2.20 lakh crore to the Railways.

The stock listed on the exchanges – NSE/BSE through the IPO route in Jan 2021.

Moat/Advantages of IRFC:

  • No Competition (Monopoly & Maximum Say)
  • Profit Making Entity
  • Fully Owned by Government of India (Sovereign Backing)

Stock Returns Criteria:

  • Indian Railways
  • Performance of Projects in which IRFC has invested
IRFC Performance in the past 1-year

Challenges to Growth:

From March 2020, owing to Covid-19, transportation has been affected to the optimum, and Indian Railways is no exception.

Indian Railways to deploy over 2,500 doctors, 35,000 ...
Covid-19 Testing at Indian Railway Platforms

Owing to this, we cannot expect sudden returns till normalization is arrived at. This highlights that the stock will be under pressure for some time to come.

Railways to form SPVs with 17 states for infrastructure ...
Railway Infra Projects funded by IRFC

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