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Informist, Tuesday, Nov. 5, 2024

By Shubham Rana

NEW DELHI - Indian Railway Finance Corp. Ltd. is looking to expand its lending activities beyond the Indian Railways, Manoj Kumar Dubey, chairman and managing director of the company, said on Tuesday. The company will diversify its lending portfolio to sectors with backward and forward linkage with Indian Railways and also the logistics ecosystem, Dubey said. 

"After listing and with the size of balance sheet which is nearly 5 lakh crores (INR 5 trillion), it is incumbent upon this company now to diversify," Dubey said in a post-earnings analyst call. "There is no requirement now just to be dependent upon the MoR (Ministry of Railways) funding only. 

IRFC on Monday reported a 4.4% year-on-year rise in net profit to INR 16.13 billion. At 1208 IST, shares of the company were down 2.2% at INR 149.99 on the National Stock Exchange. The company last month already sanctioned a finance lease of INR 7 billion to NTPC Ltd. under the general-purpose wagon investment scheme of the Ministry of Railways for NTPC's purchase of 20 rakes.

Dubey said the company is looking at all projects related to railways such as hotel construction, and it will start funding such projects from the "next quarter and next financial year". Going further, the company will leverage its balance sheet strength to make funding available to all sectors as per its mandate, Dubey said. Once IRFC expands its financing activities, it will start lending at "attractive rates", which will help raise its margins. At present, IRFC does bulk of its lending with a margin of 35-40%, Dubey said.

The company has no constraints on growing further and there is no need for capital infusion right now, Shelly Verma, director finance, said during the call. The company will also look to further bring down the weighted leverage cost of capital, which has always been lowest among the peers, the chairman said.  End

Edited by Vandana Hingorani

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