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Informist, Wednesday, Mar. 18, 2026

 

--IRFC CMD: Trying to keep cost of borrowing lower than benchmark Gsec rate

--CONTEXT: IRFC CMD Dubey speaking at FICCI's Infrastructure Conclave 2026

--IRFC CMD: Looking at offshore fundraising to contain cost of borrowing

--IRFC CMD: Trying to keep cost of borrowing below 8% at all times

 

NEW DELHI – Indian Railway Finance Corp. Ltd. is actively planning to maintain its cost of borrowing at a level that is lower than the yield on the benchmark government bond, Chairman and Managing Director Manoj Kumar Dubey said Wednesday. "We are trying to keep the cost of borrowing below 8% at all times," Dubey said. 

 

The Navratna public sector enterprise finances projects that have forward or backward linkages with railways. At 1141 IST, the benchmark 10-year Indian government bond traded at INR 98.41 or 6.71% yield, little changed from its close on Tuesday.

 

The company is carrying out a mix of domestic and offshore borrowing to keep its cost of borrowing low, Dubey said. "Generally, we borrow 25% via external commercial borrowing to benefit from lower interest rates," Dubey told Informist. 

 

The railway financier's cost of borrowing was about 7% at the end of December, Dubey had said in an analyst conference call after the company's December quarter results. "And overall cost is always remaining less than 7%...at times it may be quite attractive even to 6.5%-6.6% level," he had said. "The target we are looking forward to is a borrowing mix which is cheaper than the G-Sec rate." IRFC's board has approved a market borrowing programme of up to INR 700 billion for 2026-27 (Apr-Mar).  

 

Dubey is scheduled to meet officials from Japan's MUFG Bank Ltd. Wednesday. "We are happy that Japanese investors are showing interest in the Indian infrastructure sector, and we want to tap that opportunity," Dubey told Informist. In FY26, IRFC raised yen equivalent of $700 million from MUFG Bank and Sumitomo Mitsui Banking Corp.

 

IRFC had first raised funds from the Japanese market in FY22. It had raised the yen equivalent of $1.10 billion in two tranches of $700 million and $400 million, with a tenure of 10 years and seven years, respectively. These were in the form of green bonds or green loans.

 

Dubey also said that IRFC would like to foray into infrastructure investment trusts to create an ecosystem where projects can be commercialised at every stage. This will also help in bringing down the cost of borrowing further, he said.

 

For the nine months ended December, IRFC reported a net profit of INR 53.24 billion, up 10.5% on year. At 1245 IST, shares of the company traded 1% higher at INR 97.82 on the National Stock Exchange.  End

 

US$1 = INR 92.45

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Priyasmita Dutta

Edited by Avishek Dutta

 

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