On 20 January 2021, Rs. 4,633-crore IPO of the Indian Railway Finance Corporation (IRFC) was oversubscribed. The subscription has been closed now. The issue received bids for 4,35,20,31,250 shares, which was 3.49 times the issue size of 1,24,75,05,993 shares.
The Initial Public Offering (IPO) of the Indian Railway Finance Corporation (IRFC), a subsidiary of the Indian Railways received 65% subscription on the first day of bidding, i.e., 18 January 2021.
As per the bidding data available on the exchanges, the offer received bids for 80.09 crore equity shares against an IPO size of over 124.75 crore equity shares. Investors can participate in the first public issue by a railway non-banking financial company by placing bids in a lot size of 575 shares-- Rs. 14,950 per lot.
The IPO of IRFC closed today with an enthusiastic response from investors in all the categories. Against an amount of Rs 3244 cr to be raised(ex-anchor)bids of more than Rs 11200 cr have been received.We thank all the investors for their interest. pic.twitter.com/RSBSrguwBX
— Secretary, DIPAM (@SecyDIPAM) January 20, 2021
Earlier in 2019, Indian Railway Catering and Tourism Corporation Ltd. held an IPO on the National Stock Exchange.
| IPO Date | 18 January 2021 to 20 January 2021 |
| Issue Type | IPO |
| Issue Size | 1,782,069,000 Shares of Rs.10 |
| Fresh Issue | 1,188,046,000 Shares of Rs.10 |
| Offer For Sale (OFS) | 594,023,000 Shares of Rs.10 |
| Face Value | Rs. 10 per share |
| IPO Price Band | Rs. 25-26 per share |
| Market Lot | 575 shares |
| Minimum Order Quantity | 575 shares |
| Listed At | BSE, NSE |
Through this, the Centre, the promoter of IRFC, will offload a 13.6% stake in the company. This will bring promoter shareholding to 86.4% post issue. At the higher price band of Rs. 26 per share, the government would raise Rs. 3,243 crore and the company will have a market cap of Rs. 23,845 crore. With the help of IPO, IRFC will boost its capital base and general corporate purposes.
Indian Railway Finance Corporation (IRFC)
1- It is a subsidiary of the Indian Railways.
2- It was established in the year 1986.
3- It finances the acquisition of locomotives, coaches, wagons, trucks, flats, electric multiple units, containers, cranes, trollies, etc. through the Finance Leasing Model.
4- Finance Leasing Model involves-- the seller, the buyer (lessee) and the financier (lessor).
How does the Finance Leasing Model work?
The ownership of an item is transferred from the seller to the lessor in exchange for the payment. The lessee then contracts with the lessor for the use of the item in exchange for a periodic fee. Once the leasing contract is over, the seller may or may not retake the ownership of the item.
Initial Public Offering (IPO)
Initial Public Offering (IPO) is the selling of securities to the public in the primary market. It is when a company which is not listed on the stock exchange makes either a fresh issue of securities or an Offer For Sale (OFS) of its existing securities or both for the first time to the public. It is generally used by the new and medium-sized companies to expand their business.
Primary Market/New Issues Market: It deals with new securities being issued for the first time.
Stock Market/Stock Exchange: In this type of market, existing securities are bought and sold.
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