Irfc Bond Issue Oversubscribed
The issue opened on July 5 and closed on August 20. The original closing date was extended by a month in view of the rousing response.
Although the figures are still being compiled, the total subscription is estimated at Rs 475 crore, according to the information from different centres.
The issue is significant as, for the first time, port trusts have participated in it. The subscription by the Mumbai Port Trust was Rs 72 crore and that by the Madras Port Trust Rs 32 crore.
The surface transport ministry had earlier issued a notification making IRFC bonds eligible for investment by port trusts.
The good response has egged on the IRFC to go in for a second tranche some time this month. The corporation is considering a target amount of Rs 200-250 crore, but the final figure will be subject to approval by the IRFC board. The second tranche will consist only of tax-free bonds.
Under the resource mobilisation programme of the railways for the current financial year, the IRFC has been asked to raise Rs 1,850 crore to part-finance the 1996-97 plan size of Rs 8,130 crore. The oversubscription to the first tranche has cut down the amount to be raised in the rest of the year to Rs 1,375 crore.
The IRFC has approached the finance ministry for permission to take the external commercial borrowing (ECB) route to raise $200 million. Officials say an issue by the railways will find wide acceptance in the international market.
The railways had got the sanction to raise $50 million in ECB last year. But it went in for $70 million only and was allowed by the finance ministry to retain the excess amount of $20 million. The IRFC expects the finance ministry to sanction a handsome amount this year too.
The corporation is planning to tap the bond market this year with an issue of taxable bonds too. The size of the issue will be decided after looking at the amount raised in the international market.
IRFC officials expressed the hope that the corporation will be able to meet the fund raising target for the year.