IRFC raises Rs 2,981 crore via maiden zero-coupon bond issue

New Delhi: An important milestone in its revenue mobilisation strategy was reached on Friday when Indian Railway Finance Corporation Ltd., the sole market borrowing arm of Indian Railways, successfully raised Rs 2,981 crore through its first Zero-Coupon Bond offering for the current fiscal year.

Strong investor interest and market trust in the PSU NBFC were highlighted by the issue, which was announced by the Central Board of Direct Taxes (CBDT).

According to an official release, the bond issue received bids in excess of Rs 7,500 crore against a base issue size of Rs 1,000 crore, with an additional green-shoe option of Rs 4,000 crore. Given the strong demand, IRFC accepted Rs 2,981 crore at a competitive yield of 6.799 per cent for the 10-year tenor bonds. The yield is considerably lower than the current AAA-rated PSU benchmark of around 7.15 per cent, indicating the corporation’s strong credit profile and favourable investor perception.