IRFC raises Rs 2,981 cr through maiden issuance of zero coupon bonds

State-owned Indian Railway Finance Corporation Ltd (IRFC) on Friday said it has raised Rs 2,981 crore through its maiden issuance of zero-coupon bonds to finance railway projects. Proceeds will be used to finance and refinance key infrastructure projects, including ongoing and upcoming rail and related infrastructure initiatives.

The issue received an overwhelming response, with bids of over Rs 7,500 crore against a base size of Rs 1,000 crore and a green-shoe option of Rs 4,000 crore, IRFC said in a statement.
IRFC accepted bids of around Rs 2,981 crore at a competitive yield of 6.79 per cent for its 10-year Zero-Coupon Notes, well below the prevailing AAA-rated PSU benchmark of 7.15 per cent.

Zero Coupon Bond or discount bond is purchased at a discounted price and pays no coupons or periodic interest to its holders.

This pricing reflects IRFC’s strong market position and its ability to mobilize funds at efficient costs, thereby strengthening its position as a preferred issuer in the Indian debt capital markets, the report said. IRFC Chairman and Managing Director Manoj Kumar Dubey said: “This issuance reaffirms IRFC’s role in supporting India’s infrastructure development and reflects continued investor confidence in our financial strength and long-term prospects”