Share Market Live

NSE

Shares of Indian Railway Finance Corporation (IRFC), the dedicated funding arm of the Indian Railways, fell more than 7 percent during intraday trade on Wednesday after an eight-day rally.

The stock opened higher at Rs 36 and later raced to its fresh 52-week high of Rs 37.10 a share on the BSE. However, the stock pared gains, possibly due to heavy profit booking at higher levels.

The stock rallied nearly 24 percent in an eight-day gaining streak till November 29. The stock closed above its IPO price of Rs 26 per share for the first time on November 17. In the past month, IRFC spurted nearly 55 percent.

IRFC raised around Rs 4,600 crore in January last year through its initial public offer. The IPO was subscribed 3.5 times with the retail individual investor's segment reaching 3.66 times.

IRFC lends funds to other units of the Indian Railways like RVNL, RailTel, Konkan Rail, and Pipavav Rail. These companies use the funds to acquire rolling stock assets and also build infrastructure, which comprises a significant chunk of Indian Railways' annual Capex.

The project mix between funding rolling stock and building railway infrastructure is 45-55 percent respectively.

The company has zero NPAs as lending to the Indian Railways is guaranteed by the government of India. Also, its tax expenses are nil as it has been granted exemptions by the government of India. It has only 37 employees and they work out of the basement of Hotel Ashok in Chanakyapuri, New Delhi.

The company, whose net worth was Rs 41,000 crore in the previous financial year, makes over Rs 6,000 crore in profits annually and has Rs 5 lakh crore in assets under management.

Shares of IRFC are trading at Rs 32.75, down 7.22 percent.

(Edited by : Rukmani Krishna)