Indian Railway Finance Corporation (IRFC) Limited Company Profile: Products,Promoters and Clients

Company Description: Indian Railway Finance Corporation (IRFC) was established on December 12, 1986, as the financing arm of Indian Railways, responsible for raising funds from domestic and international capital markets. It operates under the Ministry of Railways, Government of India, and is registered with the Reserve Bank of India as a Systemically Important Non-Deposit taking Non-Banking Financial Company (NBFC-ND-SI) and an Infrastructure Finance Company (NBFC-IFC). Over 30 years, IRFC has been essential in financing the expansion of Indian Railways by providing significant funding for its annual plans.

 

Q1. What are the Product and service offerings of the company?

IRFC provides two main services:

1. Fund Mobilization: IRFC raises funds through taxable and tax-free bond issuances, term loans from banks and financial institutions, and external commercial borrowings (ECBs). It aims to secure the lowest borrowing costs, benefiting Indian Railways by operating on a cost-plus margin basis.

 

2. Leasing Services: IRFC finances rolling stock and project assets for Indian Railways using a 30-year lease model, split into a primary 15-year period and a secondary 15-year period. During the primary period, IRFC recovers the principal and interest. At the end of the lease, assets are typically sold to the Ministry of Railways at a nominal price. The Ministry pays biannual lease rentals covering both principal and interest, ensuring a net interest margin for IRFC.

 

Q2. Who are the Promoters/Management of the company?

 

Government of India is the largest shareholder in IRFC

Smt. Uma Ranade, an IRAS officer from the 1986 batch, is the Chairman and Managing Director (Additional Charge) of IRFC. With over 35 years of experience in Indian Railways, she currently serves as Additional Member (Budget) and holds the charge of Additional Member (Finance) in the Ministry of Railways. She has held key positions such as Financial Advisor (Construction & Projects) for Western, Central, and South-Central Railways, and Principal Financial Advisor for Western and Central Railways. A graduate of St. Stephen’s College, Delhi, she has completed advanced leadership and management programs at INSEAD Singapore, Carnegie Mellon's Tepper School of Business, and the Indian School of Business, Hyderabad.

 

Smt. Shelly Verma, Director (Finance) at IRFC, holds a Bachelor's degree in Commerce from the University of Delhi and is a fellow member of the Institute of Chartered Accountants of India. With over 30 years of experience in Power Sector Financing, she previously served as Executive Director (Finance) at Power Finance Corporation Limited.

 

Shri Vallabhbhai Maneklal Patel, a B.Com graduate from Gujarat University, is a Non-Official Independent Director at IRFC. He has led Shri Ganesh Ginning & Pressing Factory since 1998 and has extensive industry experience. He has served as Vice Chairman of Kadi Nagrik Sahakari Bank and is on the advisory board of Kalupur Commercial Cooperative Bank. Active in education and philanthropy, he is Chairman of Sarva Vidyalaya Kelvani Mandal, President of Kadi Sarva Vishwavidyalaya, and Director of Sarva Vidyalaya Innovation Foundation.

 

Q3. Who are the Clients of the company?

Company extends loans to other entities of Ministry of Railways viz., Rail Vikas Nigam Ltd and IRCON International Limited.