RailEnquiry

Indian Railways plans to approach the Finance Ministry to raise at least Rs 10,000 crore through tax-free bonds in the next financial year.
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NEW DELHI, MARCH 16:   Indian Railways Finance Corporation (IRFC), the fund raising arm of the Indian Railways, will mobilise Rs 5,500 crore — Rs 6,000 crore, in the remaining two weeks of the current fiscal from the domestic market.

Funds raised by IRFC are used to pay for buying locomotives, wagons and coaches for Indian Railways.

“From the total fund mobilising target for the current fiscal of about Rs 15,000 crore, we have to raise about Rs 5,500-6000 crore. We will do that before the current fiscal ends and make available to Indian Railways,” Rajiv Datt, Managing Director, IRFC, told Business Line.

TAX-FREE ISSUE

IRFC raised about Rs 7,000 crore through its tax-free bond issues in the current fiscal, which is Rs 3,000 crore short of the Rs 10,000-crore permitted to IRFC through tax-free bonds for the fiscal.

This was because all organisations with permissions for tax-free bond issues hit the market after December 2012, in effect reducing the time window when firms could raise money. As a result, many firms have not been able to mobilise money from the market.

Last week, nine firms, including India Infrastructure Finance Corporation Ltd, IRFC, Dredging Corporation, Ennore Port and JN Port were vying to raise money through tax free bonds. NHAI did not even hit the market to raise funds as it had not spent the money raised in previous fiscal.

RAILWAYS PLAN

Meanwhile, Indian Railways plans to approach the Finance Ministry to raise at least Rs 10,000 crore through tax-free bonds in the next financial year.

“We have not firmed up the exact amount that we will seek from the Finance Ministry. But, at the minimum, we would like to ask the Ministry to maintain the Rs 10,000-crore limit,” said Railways’ Financial Commissioner Vijaya Kanth.

In fiscal 2012, IRFC had mobilised the entire Rs 10,000 crore through tax-free bonds.

This fiscal, among all issuers, IRFC may end up raising the maximum amount through tax-free bonds.