IRFC IPO

The year 2021 looks all set for a bright start, moving past the gloomy days that 2020 brought upon the world. This is especially true for the stock market which is going to have a bumper opening with the much anticipated IRFC IPO.

The Indian Railway Finance Corporation Limited IPO worth ₹4633 crore is like a wonderland for investors who have long been waiting for an appropriate opportunity to show up.

Now, it seems all those wishes have been duly heard.

The markets except for a couple such as pharmaceuticals, FMCG, telecom industries were going through a rough phase after the Corona Pandemic sat in.

But, all that changed after the lockdown restrictions were eased and the markets were soon back on track.

The Asian Development Bank stated that the Indian economy recovery rate was way better than expected.

Sensing the positive sentiment among investors, many companies floated their IPOs in the last 2 quarters last year and fared reasonably well.

Likewise, IRFC looks to hop on the bandwagon as it seeks to issue 140.7 Cr equity shares to the public.

IRFC IPO will be the first IPO floated by any public sector NBFC. 

Follow the article to find out more about this latest offering.

IRFC IPO Review

Established in 1986, IRFC Corporation of India Ltd is the financial arm of Indian Railways who works to raise funds from domestic and global capital markets.

The company primarily stands responsible for leasing, lending, borrowing of funds, and financial resources to various railway sector companies like Railtel, Rail Vikas Nigam Limited (RVNL), Konkan Railway Corporation Limited (KRCL), Pipavav Railway Corporation Limited (PRCL), etc. 

IRFC has been trusted with the responsibility to look over several crucial projects and has played its part in capacity enhancement, strengthening, and improving services across the Railways sector

In its DRHP (Draft Red Herring Prospectus) filed with SEBI dated – January 16, 2020, IRFC mentioned the following as the objectives of floating the IPO:

• Increase their equity capital base to meet our future capital requirements arising out of growth in our business 
• General corporate purposes
• To benefit from listing company’s equity shares on the stock exchanges
• To enhance the company’s visibility and brand name
• Provide a public market for the equity shares

The IRFC IPO consists of a fresh issue of 1,188,046,000 equity shares and 594,023,000 equity shares making up a total of 1,782,069,000 equity shares. 

With the number of equity shares up for grabs, the IPO provides ample opportunity for investors. 

All the IRFC IPO details are mentioned in the below table:

 

As many as 1,782,069,000 equity shares with a face value of Rs 10 per equity share are on offer in the upcoming IPOs. 

IDFC Securities, HSBC Securities, ICICI Securities, and SBI Capital Markets Limited have been roped in as the book running lead managers to look over the issuance of shares during the IPO.

The below table will help investors grab a clearer picture of IRFC’s financial performance in recent years.

 

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IRFC IPO Promoter 

The promoter of IRFC IPO is the President of India acting through the Ministry of Railways. The President of India holds the entire pre-issue paid-up equity share capital of the company

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IRFC IPO Issue Date

The IRFC IPO issue date hasn’t been finalized yet. But reports suggest that the IPO might be arriving anytime mid-January 2021.

 

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IRFC IPO Market Lot

Any information regarding the IRFC IPO market lot isn’t available at the moment. 

 

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IRFC IPO GMP

IRFC IPO GMP (Grey Market Premium) is [•]. 

Grey Market Premium (GMP) is the amount at which a company’s equity shares are traded in the grey market, i.e. trade outside the stock market. 

GMP is a great parameter for predicting how well or bad an IPO will fare out. The GMP is purely dictated by the demand and supply of the IPO shares.

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How To Apply For IRFC IPO?

Well, there are multiple ways to apply for an IRFC IPO, but there are some basic requirements that an investor should fulfill.

Among many methods to apply for the IPO, the most convenient is that of ASBA. However, for this, the trader will need to have a demat account first. 

Let us assist you in opening a Demat account, simply leave your Name and Contact Number in the form below.

ASBA short for Application Supported by Blocked Account, is a process that helps traders to trade in IPO.

Under this process, the IPO application money remains with the investor until the purchased shares are allotted in the investor’s account.

Another requisite is that the investor should have a bank account in the Self Certified Syndicate Banks (SCSBs). These are certain banks that follow the SEBI regulations. 

We advise that investors take a look at the list of SCSBs as well. 

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Apply For IRFC IPO Through ASBA

There are two methods that an investor can apply for an IRFC IPO through ASBA – online and offline. Investors can opt for any method as per their comfort. 

We have discussed the steps for each method below:

Online Method

1. The investor can generate the ASBA form by visiting the NSE official website. 
2. The ASBA Form contains details such as –

• Name of the applicant
• PAN Number
• Demat Account Number
• Bid Quantity
• Bid Price, etc. 

The ASBA form instructs the bank to block the amount to be used for purchasing shares in an IPO until the shares are credited to the individual’s Demat account. 

3. Upon submission, the form details are verified by the SCSB before they upload the bid on the NSE ASBA system.

Offline Method 

For applying for the IRFC IPO offline, traders will need to visit their SCSB and fill the ASBA form. 

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IRFC Company Information

IRFC Corporation of India Ltd is a Public Sector Undertaking that stands responsible for ensuring broadband as well as VPN services to Indian customers.

The company has the honorary distinction of being one of the largest neutral telecom infrastructure providers in India.

Established in 2000, with the motive of improving the Indian Telecom sector and services. The telecom company is categorized as a “Miniratna” of India. 

The company has been trusted with the responsibility of implementing the “Google Station” Wi-Fi and WiMax projects in the country.

The company has installed optical fiber cable along railway tracks of as many as 5,848 railway stations across India.

The company in the DRHP filed with SEBI stated the following objectives for listing the company shares – 

• Increase their equity capital base to meet our future capital requirements arising out of growth in our business 
• General corporate purposes
• To benefit from listing company’s equity shares on the stock exchanges
• To enhance the company’s visibility and brand name
• Provide a public market for the equity shares

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Conclusion

IPO without a doubt is the best chance for investors looking to enter the stock market. This year has several IPOs lined up one after the other. But, IRFC IPO seems to be one of the most significant ones.

Investors will have to shell out excessive money for purchasing the listed stocks as there are intermediaries involved in the secondary market.

However, traders save a lot of money by purchasing shares directly from the company through IPO.

IRFC looks to issue as many as 140.7 cr equity shares to the public which makes for ample opportunity for investors to purchase shares. 

If the investors are worried about safety, IRFC IPO is as safe as they come. Since the company is a government entity, the investors can trust the firm blindly. 

As for the talk of how to apply for the IRFC IPO, investors can participate in the IPO by ASBA process. However, investors will need a Demat account and a savings account with an SCSB.

Interested to open an account in order to invest in an IPO?

 

Know more about IPO