IRFC's Rs 4,500-crore IPO subscribed 3.7 times on the final day

State-owned Indian Railway Finance Corporation (IRFC) garnered 3.5 times subscription, helping the Centre mop up Rs 1,500 crore. The retail and institutional portion of the issue was subscribed around 3.7 times each, while the high net-worth individual portion garnered 2.7 times subscription. 

Market players said the response was lukewarm when compared to some of the recent issues. They said the large issue size and unattractive grey market premium led to the tepid response. The overall issue size was Rs 4,500 crore—two-thirds of it being fresh fund raise. The employee portion of the IPO was subscribed 44 times. At the top-end of the price band of Rs 26, IRFC will have a market capitalisation of nearly Rs 34,000 crore — almost equal to its FY20 book value on the diluted basis.

IRFC is responsible for financing about 30-45 per cent capex of the Indian Railways. It is mainly engaged in financing the acquisition of rolling stock assets and other assets. It also lends to other entities under the Ministry of Railways. Following the IPO, the government’s holding in the company will decline from 100 per cent to 86.4 per cent.