IRFC IPO subscribed 3.49 times. The public issue subscribed 3.66 times in the retail category, 3.78 times in QIB, and 2.67 times in the NII category by Jan 20, 2021 7 pm. IRFC IPO is a fresh Issue of 1,188,046,000 Equity Shares and Offer for sale of up to 594,023,000 Equity Shares. (The offer will constitute upto 13.64% of the post offer paid up Equity capital). Net Issue size of the IRFC IPO is Rs 4455 Cr – Rs 4633 Cr. No. of shares to be offered are 1,782,069,000 Equity shares. IRFC face value of the share is Rs 10. IRFC Employee Reservation of Equity Shares is aggregating upto Rs 5 mn.

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IRFC IPO price bank is Rs 25 – Rs 26 and the bid lot is 575 shares and in the multiple thereof. Post Issue Implied Market Cap of Indian Railway Finance Corporation will be Rs 32671 – Rs 33978 Cr. Book Running Lead Managers are DAM Capital, HSBC Securities, ICICI Securities, SBI Capital Markets and the Registrar is KFin Technologies.

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IRFC share allotment is likely to be finalised on 25th January while listing could happen on 29th January, according to brokerages. For the year ended March 2020, IRFC had posted a net profit of Rs 3192 cr. Its assets under management were at ₹2.78 lakh crore as of September 30, 2020. Ahead of the IPO, IRFC had raised Rs 1398.63 cr from 31 anchor investors.
 
IRFC saw a strong growth during FY20, NII grew at 16.2% vs 9.2% in FY19, PPoP by 14.8% vs 9.9% in FY19, PAT saw a strong growth of 49.2% vs 6.9% in FY19 as it is not required to pay MAT tax. As a borrowing arm, IRFC financed 48.2% of Capex of Indian railways through various sources of funding from the market. At upper price band, IPO is priced at a P/E of 7.6x and P/BV of 1.0x based on FY20 with ROA of 1.3%. As backed by GOI with nil asset quality and strong CAR at 434% and ROA of 1%+, IDBI Capital recommends subscribing to the issue.
 
IRFC Valuations:

There are no directly comparable peer companies which operate in a business space similar to that of IRFC. However, when comparing it with other PSU NBFCs, IRFC stands apart with nil NPAs but lower (albeit stable) margins. On a diluted basis at the upper price band, IRFC is valued at 1x FY20 BVPS. However, being the dedicated market borrowing arm for the Indian Railways, IRFC enjoys the highest possible credit ratings for an Indian issuer both for domestic and international borrowings.