Irfc Plans Road Shows For $150m Ecbs Next Month
Indian Railway Finance Corporation (IRFC) is launching roadshows next month to raise capital for the railways current fiscals annual plan outlay of Rs 8,300 crore. The corporation hopes to net $150 million (Rs 500 crore) worth of external commercial borrowings from the roadshows planned for Tokyo, Taipei, Singapore and London.
Bahrain could be another venue for the roadshow in the next phase, but Seoul does not figure on the IRFCs list. The corporation does not want to tap the South Korean market this time possibly because of last times discouraging experience when it went for an ECB of $50 million but could actually net only $70 million.
IRFC has been mandated to raise Rs 2,150 crore in 1997-98 to part-finance the current plan. In 1996-97, it managed to raise Rs 1,930 crore against its target of Rs 1,850 crore.
This time too the PSU is equally upbeat. This is partly because the response to its bond issues in the current fiscal, so far, has been a good. IRFC managing director N P Srivastav is sanguine that the target for the year would achieved.
Its tax-free, privately placed bond issue of Rs 300 crore has already been over-subscribed netting Rs 325 crore as per the provisional computation, while the actual could be still more. The success is attributed to IRFCs decision to tap the bond market in the very beginning of the financial year.
Again, the response to its 14.25 per cent taxable bond issue of Rs 250 crore backed with a greenshoe option has been equally encouraging. The issue, which opened on May 12, is still open and is said to have already netted Rs 500 crore. It could go up to Rs 900 crore which the company is entitled to retain as per the governments permission to it in this regard.
Currently, on IRFCs immediate agenda are two more issues a tax free bond issue of Rs 400 crore to be launched in the years second half and an external commercial borrowing of $150 million (Rs 500 crore) to be launched next month. This ECB is being managed by ANZ Grindlay bank which had also managed the corporations previous ECB.
The possible reason for IRFC being upbeat regarding the market response to its issues is that at a time when the Industrial Development Bank of India (IDBI) is facing difficulties with its 13.5 per cent taxable bond issue, IRFC is going strong on its 14.25 per cent bond issue much of the same nature.