IRFC Raises Rs 2,981 Crore Via Maiden Zero-Coupon Bond Issuance

State-owned Indian Railway Finance Corporation Ltd. or IRFC on Friday said it has raised Rs 2,981 crore through maiden Zero-Coupon Bond issuance to fund projects of railways.

The proceeds will be used for financing and refinancing key infrastructure projects, including ongoing and upcoming railway and allied infrastructure initiatives.

The issue received an overwhelming response, with bids of over Rs 7,500 crore against a base size of Rs 1,000 crore and a green-shoe option of Rs 4,000 crore, IRFC said in a statement.

IRFC accepted bids of approximately Rs 2,981 crore at a competitive yield of 6.79% for its 10-year Zero-Coupon bonds, well below the prevailing AAA rated PSU benchmark of 7.15%.

Zero Coupon Bond or discount bond is purchased at a discounted price and does not pay any coupons or periodic interests to the holders.

This pricing reflects IRFC’s strong market standing and its ability to mobilise funds at an efficient cost, reinforcing its position as a preferred issuer in India’s debt capital markets, it said.

IRFC Chairman and Managing Director Manoj Kumar Dubey said, "this issuance reaffirms IRFC’s role in supporting India’s infrastructure development and reflects the continued confidence of investors in our financial strength and long-term outlook."