Below are Views On Indian Railway Finance Corporation Limited IPO By Jyoti Roy, Angel Broking
Indian Railway Finance Corporation Limited (IRFC) is a dedicated market borrowing arm of Indian Railways. Their primary business is financing the acquisition of rolling stock assets, leasing of railway infrastructure assets and national projects of the Government of India (GoI) and lending to other entities under the Ministry of Railways, GoI. IRFC has posted strong growth in operating income of 20.7% CAGR between FY18-20 while net profits have grown at a CAGR of 26.3% during the same period. Company is unlikely to face any asset quality issues given the fact that the company caters to the Government of India. At the higher end of the price band the stock would be trading at P/BV of 1.0x fully diluted post issue book value of `26.6 per share. We expect the company to post strong growth driven by capex by Indian railways along with stable margins due to cost plus model. Given the growth prospects, we recommend a SUBSCRIBE rating on the issue.
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