Indian Railway Finance Corporation Ltd(IRFC)

NSE: IRFCBSE: 543257

₹ 74.5-3.31%refreshed 23 Oct, 03:59 pm ISTMarket cap: ₹ 97,360 crWebsite: irfc.co.in/Updated: 24 Oct 2026

About

Indian Railway Finance Corporation (IRFC), set up on 12th December 1986, is the dedicated funding arm of Indian Railways. It borrows from domestic and overseas capital markets to finance rolling stock and railway assets, which it then leases to the Ministry of Railways. It is a Navratna, Schedule 'A' PSE, one of only 26 CPSEs to hold Navratna status, and is registered with RBI as an NBFC-ND-SI and Infrastructure Finance Company. AUM was INR 4.85 lakh cr in FY26, and revenue for FY26 was Rs 27284.69 Cr.^[1][2][3][4]

Business model

Principal business: borrowing from financial markets to finance acquisition or creation of assets that are leased to Indian Railways, meeting the predominant portion of its Extra Budgetary Resources requirement.^[1]
Ministry of Railways lending runs on a cost-plus lease structure; interest rate and FX risk are largely passed through to MoR, and credit risk on MoR is described as minimal (FY25 annual report).^[5][1]
For project assets there is an initial 5-year moratorium during which MoR pays no lease rent.^[1]
Over 90% of AUM was still with Railways at about 35 bps spread as of Q2 FY27; non-IR lending earns 2-3.5x that margin.^[2]
All non-MoR borrowers so far are CPSEs or state government entities (e.g. NTPC, CONCOR, RVNL, state Gencos), with railway forward/backward linkage as a selection criterion.^[5]
Long-term AUM mix target is 60% MoR / 40% non-MoR, revised from an earlier 75:25 target.^[4][2]

AUM and disbursements

AUM was INR 4.85 lakh cr in FY26, up from INR 4.60 lakh cr at March 2025.^[2][1]
No disbursement was made to MoR in FY25 because the target allocation for the year was nil.^[1]
FY26 disbursements reached INR 35,067 cr, against guidance of INR 30,000 cr; Q1 FY27 disbursements were ~INR 2,000 cr.^[4]
FY26 agreements executed exceeded INR 75,000 cr against guidance of INR 60,000 cr.^[6]
Management guides AUM near INR 5 lakh cr by end FY27, with a possible shortfall of INR 1,000-2,000 cr, and FY27 disbursements above FY26 levels (as of Q2 FY27).^[2]
Railway-sourced disbursements targeted at INR 50,000 cr or more a year from FY28 for a decade.^[2]

Margins and cost of funds

Borrowing cost (WACC) was 6.55% as of Q2 FY27, with an aim to hold it around 6.55% in FY27; average cost of borrowing was ~7.27% in FY24.^[2][7]
NIM on the Railway book was 1.3% as of Q2 FY27; overall NIM was 1.48% in Q1 FY27 vs an average 1.50% in FY26 and 1.40% in FY25.^[2][6]
Minimum spread targeted at 85-90 bps on diversified lending (Q2 FY27 call).^[2]
Management reports no prepayment pressure: there is no prepayment penalty or floor price, and it picks up loans that borrowers prepay to other lenders.^[2]

Asset quality and capital

GNPA was NIL as of Q1 FY27 and FY26; the company reports a nil-NPA track record.^[6][1]
CRAR was 110.91% at end-FY26 vs 161.16% at 9M FY26 and 258.61% at H1 FY26.^[4]
Net gearing ratio was 7.69x at end-FY26 vs 7.38x at 9M FY26 and 7.25x at H1 FY26.^[4]

Funding

Funds are raised through taxable and tax-free bonds, term loans from banks and financial institutions, and offshore borrowings.^[1]
Raised yen ECBs of $300 mn and $400 mn in FY26 at ~6.2%-6.3% all-in hedged cost; targets ECB at 30-35% of the borrowing mix.^[4]
Issued India's first zero-coupon 10-year bullet bond in calendar 2025 at 6.80%; 54EC bond market share was 28% in FY25-26.^[4]
No corporate tax or MAT liability is expected for the next 5-7 years, due to ~INR 3,000 cr of unabsorbed depreciation.^[4]

Key clients and deals

FY25: agreed a ₹5,000 Crore term loan to NTPC Renewable Energy and disbursed ₹700 Cr; sanctioned a ₹700 Crore finance lease for NTPC BOBR rakes.^[1]
FY25: lowest bidder for ₹3,167 Crore financing of PVUNL's Banhardih Coal Block; signed an MoU with REMC for railway green energy.^[1]
Q3 FY26: refinanced DFCCIL's World Bank loan for INR 9,821 cr in rupees.^[8]
Q4 FY26: ~INR 12,000 cr refinancing of bank loans to three HURL fertilizer plants (Gorakhpur, Barauni, Sindri).^[4]
Q1 FY27: agreed to refinance Hyderabad Metro Phase 1; evaluating Phase 2 (~125 km, ~INR 40,000 cr).^[6]
All income comes from India; exports contributed nil to turnover in FY25.^[1]

Pipeline

Loans to metros, ports, renewables, thermal Gencos and road links are lined up for disbursement in Q3 or early Q4 FY27.^[2]
Railway pipeline above INR 20 lakh cr: sanctioned Dankuni-Surat DFC (>INR 3 lakh cr), seven HSR corridors and six JV/PPP freight lines (Q2 FY27).^[2]
An aggregator/co-financing model with the World Bank, multilaterals and domestic lenders for the large corridors is targeted by end FY27.^[2]
Metro and rapid rail financing targeted at INR 20,000-30,000 cr of annual disbursements.^[6]

Operations and headcount

Operates from a single office, its registered office in New Delhi (FY25).^[1]
Employee count almost doubled in the year to Q2 FY27 to build appraisal capacity; industry veterans were hired as CRO, compliance head and advisors.^[2]
Operating expense was 0.10% of total income in FY26.^[4]

Market Cap

₹97,360 Cr

High / Low

₹137 / 74

Stock P/E

13.2

Price / Book

1.6

Book Value

₹43

EPS

₹5.4

No. of Shares

1,306.85 Cr

ROE

12.8%

Debt / Equity

7.69

Sales

₹27,285 Cr

Net Profit

₹7,009 Cr

Promoter holding

82.9%

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