Days ahead of its initial public offering (IPO) Indian Railway Finance Corporation (IRFC) has managed to raise Rs 1,389 crore from 31 anchor investors. IRFC informed the bourses that it has allocated 53.45 crore equity shares at Rs 26 per share on Friday to anchor investors. The IPO of the PSU firm opens for subscription on Monday, where 178 crore equity shares of the firm will be available for subscription. IRFC will be the first IPO of 2021 as it looks to raise Rs 4,633 crore through a fresh issue and an offer for sale (OFS) by the President of India through the Ministry of Railways.
Marquee names among the anchor investors for IRFC include Goldman Sachs, BNP Paribas, Kuwait Investment Authority, and Monetary Authority of Singapore. Of the total 53.45 crore shares that were allotted to anchor investors by IRFC, Monetary Authority of Singapore picked 4.15% for Rs 57.62 crore. BNP Paribas picked 3.24% of the shares for Rs Rs 44.97 crore, Kuwait Investment Authority was allotted 2.8% of the shares for Rs Rs 39.98 crore, and Goldman Sachs got 2.16% of the stocks for an investment of Rs 29.98 crore. Government of Singapore was the largest investors among foreign institutions, buying 16.39% of the anchor investor portion for Rs 235 crore.
Among domestic institutions that lined up as anchor investors IRFC’s IPO, HDFC Equity Fund picked 19.32% of the shares on offer for anchor investors for Rs 268 crore. HDFC’s Housing Opportunities Fund and Dividend Yield Fund too were among the anchor investors. Nippon India Tax Saver (ELSS) Fund bought 8.99% of the shares for Rs 124.99 crore. Four other Nippon India Funds too picked up stake in IRFC. In total, four domestic mutual funds were allocated 32.61 crore equity shares from the anchor investor portion.
The issue consists of a fresh issue of Rs 3,088 crore and an OFS worth Rs 1,544 crore. The issue will open for subscription on Monday and close on Wednesday. Investors can bid for the PSU NBFC at price band of Rs 25-26 per share, in a lot size of 575 shares, translating to Rs 14,950 per lot. QIB portion of the IPO makes up 50% of the total issue while HNIs get 15% and retail investors get 35% of the issue to bid for.
IRFC, the borrowing arm of the Indian Railways had an AUM of Rs 2.78 lakh crore at the end of the first half of the current fiscal year. Analysts believe the firm is well placed to grow with the increasing footprint of the Indian Railways. Through the IPO, the President of India, the promoter of IRFC, will offload 13.6% stake in the firm bringing the promoter shareholding to 86.4% post-issue. Brokerage and research firm Choice Broking said that at the higher price band of Rs 26, IRFC is valued at P/BV of 1x to post issue adjusted BVPS of Rs26.6, while assigning a ‘Subscribe’ rating for the IPO.