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Indian Railway Finance Corporation Ltd. Net Profit for 9M FY2021 grows by 15.65% on YoY basis

Indian Railway Finance Corporation Ltd. Net Profit for 9M FY2021 grows by 15.65% on YoY basis 1

Indian Railway Finance Corporation Limited (“IRFC” or the “Company”) the dedicated market borrowing arm of the Indian Railways posted profit growth of 15.65% to Rs.2934 Crore for the nine months ended 31st December, 2020 from Rs. 2,537 Crore for the corresponding nine months in the previous year. The total revenue from operation grew by 10.76% on YoY basis for the same period to stand at Rs. 11,315.51 crore. The Board of Directors of IRFC has declared an interim dividend of Rs 1,380 crore translating to Rs.1.05 per share for the financial year 2020-21, on a face value of Rs 10 per equity share.

The annual disbursement for IRFC grew more than tenfold to Indian Railways, from Rs. 11,000 crore in FY 2014-15 to Rs. 1.13 lakh crore mandated for the FY 2020-21. The Assets Under Management (AUM) is set to cross Rs. 3.75 trillion at the end of the current fiscal, registering a Compounded Annual Growth Rate (CAGR) of around 30 per cent over the last five years.

Commenting on the financial results, Shri Amitabh Banerjee, Chairman and Managing Director, IRFC, said, “The massive investment plan that Indian Railways has drawn for the growth, expansion and modernization of Indian Rail System in the current decade and the fact that a significant portion of the funding requirement is to be met through IRFC, there will be a sustained growth in revenue and profitability in future. This can be substantiated by the results which we have witnessed for the 9M FY2021 results. We are also happy to announce a dividend of Rs. 1.05 per share to our shareholders.”

The Company has been able to raise funds at the most competitive rates and terms both from the domestic and overseas financial markets which has helped to keep its cost of borrowing low. The Company’s papers command a premium of at least 20 to 30 bps in the domestic financial market and 50 to 60 bps in the overseas financial markets as compared to its peers.

This can be attributed to the strong linkages with the Government, highest possible credit rating from the domestic credit rating agencies and rating at par with sovereign from international credit rating agencies, strong financials with zero Non-Performing Assets and strong Capital Adequacy Ratio of more than 400%, which is unique to a finance company and its constant endeavor for optimum diversification of borrowing portfolio in terms of markets, instruments and investors.

Shri Amitabh Banerjee, also added, “The Company is in the process of drawing strategies for making selective forays into areas having forward and backward linkages with Railways with the backing of the Government of India, that will give further boost the growth in revenue and profitability of the Company and help it fulfill the expectations of the millions of its shareholders, who have reposed their faith and confidence in IRFC.”

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