IRFC May-24 Conf call

IRFC Full Form & Purpose

• IRFC stands for Indian Railway Finance Corporation Limited.
• IRFC is a dedicated financing arm of the Indian Railways.
• Purpose: To finance railway projects and infrastructure, enabling the Indian Railways to focus on its core operations - running trains and providing passenger and freight services.

Indian Railways Capital Expenditure

• The gross budgetary support for capital expenditure for railways in the interim budget of the financial year 2024-25 was ₹2.40 lakh crore.

IRFC Mandate and Borrowing Mix

• IRFC's mandate covers financing of projects with backward and forward linkages with the railways.
• Backward linkages include mining, manufacturing, and transportation of raw materials.
• Forward linkages include transportation and distribution of finished goods.
• IRFC's borrowing mix as of the 31st March 2024 includes:
  • Domestic borrowings
  • Foreign currency borrowings

IRFC Assets & Tenure

• Weighted tenure of IRFC's assets as of the 31st March 2024 was 17.7 years.

IRFC Financial Performance

• IRFC's strong financial performance is demonstrated by:
  • Consistent growth in profit after tax.
  • Healthy return on equity and return on assets.
  • Strong capital adequacy ratio.
  • A track record of timely debt servicing.

IRFC Security State & Rolling Stock Financing

• IRFC is fully owned by the Government of India and carries a sovereign guarantee.
• IRFC is not limited to rolling stock financing. It finances a range of railway projects, including dedicated freight lines, multi-modal logistics parks, and renewable energy for railway networks.

IRFC Lease Periods

• IRFC's total lease period for financing is 30 years for rolling stock projects and 30 years for project assets, subject to applicable Indian law.
• Primary lease period for rolling stock projects is 15 years.
• Primary lease period for project assets is 15 years.

IRFC Initiatives & Credit Risk Management

• IRFC's current focus includes exploring funding opportunities beyond the existing mandate:
  • State JVs (Joint Ventures)
  • Dedicated freight lines
  • Multi-modal logistics parks
  • Renewable energy for railway networks
• IRFC's internal credit risk management mechanisms include:
  • A board-approved credit policy
  • A dedicated credit committee

IRFC Dividend & EBR-Free Period

• IRFC's final dividend recommended by the board for FY 24 is ₹2.10 per share.
• Total dividend declared by IRFC for FY 2024 is ₹2.10 per share.
• According to IRFC's management, their current EBR (Equity-Based Reimbursement)-free period will last for 10 years.

Indian Railways Budget Status

• The Indian Railways budget is currently under government review and approval.