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IRFC IPO - Apply or Not ?

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https://www.sebi.gov.in/filings/public-is.../j
About IRFC Limited
IRFC is the dedicated market borrowing arm of the Indian Railways. They are wholly-owned by the Government of India acting through the Ministry of Railways (MoR). They are registered with the Reserve Bank of India as a NBFC are classified under the category of an “Infrastructure Finance Company”.
IRFC IPO – Issue Details (Tentative)
IRFC IPO Date – Dec 28 to Dec 30, 2020
Face Value – Rs 10 per share
IPO Price band – Rs 25 to Rs 26 per share
Issue Size – Total of Rs 4,633 Crores (approx)
Fresh issue – Rs 3,089 Crores
OFS – Rs 1,544 Crores
IPO Lot Size 575 shares

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About IRFC Limited

Objects of issue – IRFC IPO

Here are the objects of the IPO issue.

1) Offer for sale (OFS) of 59.4 Crore shares: Money received under OFS would go to selling shareholders and company would not receive any proceeds.

2) Fresh issue of 178.2 Crore shares: Proceeds would be used for -

i) Augmenting equity capital base to meet its future capital requirements arising out of growth in its business.

ii) General corporate purpose

Who are the company promoters?

President of India acting through the Ministry of Railways (MoR) is the promoter of IRFC.

Company Financials

Here is the summary of the financial information of the company.

Its EPS for FY2020 is Rs 3.9 and last 3 years average EPS is Rs 3.62.

What are the key strengths of IRFC Limited?

Every investor should understand the company’s key strengths so that one can compare with its competitors to know how unique is such company in their business. Their investment decision would change based on these facts. Here are the key strengths of the company.

1) Strategic role in financing growth of Indian Railways

2) Competitive cost of borrowings based on strong credit ratings in India and diversified sources of funding

3) Consistent financial performance and cost plus model

4) Low risk business model

5) Strong asset-liability management

6) Experienced senior management and committed team

What are the various strategies of IRFC Ltd?

Company strategies would help investors to know what company is intending to do in the future and whether these strategies would help in revenue or margin growth. Such information would help investors to decide whether to invest for short term, medium term or for the long term. Here are the company strategies.

1) Diversification of borrowing portfolio

2) Broaden its financing portfolio

3) Continued focus on asset-liability management

4) Provide advisory and consultancy services and venture into syndication activities

Why to invest in this IPO?

Here are a few reasons to invest.

1) IRFC is the only public sector NBFC company that has come to public now.

2) It has generated strong revenue growth in the last 4 years (CAGR 20%).

3) Its margins have improved in the last 4 years (CAGR 58%). It was generating 11.5% margins in FY2017 Vs 26.5% in FY2021.

4) There are several high speed rail corridor projects that are estimated to come in the next couple of years. There is huge financing required for such projects. This would provide good opportunities for IRFC.

62 Comments  |  
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Deal Subedar Deal Subedar
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….let the details come out…

…everything depends upon the pricing…I am willing to put my money on crap company provided it put some money on table for investors…

Deal's Advocate Deal's Advocate
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anthrax.ut wrote:

why such a strong no…. dont they have a big customer in indian railway??

Based on the Gmp and market review i am fully avoiding. After all IPO follows market review most of the time. Playing safe

In addition to this,
Market is making all time high day by day without any reason. If there will be blood bath happen this ipo crush very badly because this ipo not getting a good amount of GMP and market attraction.
I might be wrong, this is what my instincts are.

Deal Captain Deal Captain
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Huge IPO and hence it should be equivalently subscribed or else chances of getting short term gains out of this would be bleak confused
#AA_JJ sunglasses

Deal Captain Deal Captain
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managequota wrote:

Who is GMP by the way from a layman perspective

Price band + GMP = Listing estimate on listing day.
#AA_JJ sunglasses

Pro Blogger Pro Blogger
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managequota wrote:

Who is GMP by the way from a layman perspective

Ipo applications are sold in grey market before listing. People pay hefty sum for it. So, the extra money people pay per share per application is our GMP. 🙂🙂🙂🙂

Deal Cadet Deal Cadet
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GMP may not always be right. They faulted many times. Study the fundamental and invest. Use your money wisely.

Budding Star Budding Star
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sivaramkb wrote:

GMP may not always be right. They faulted many times. Study the fundamental and invest. Use your money wisely.

Saavdhaan rahe satark rahe
T – be cautious

Deal Subedar Deal Subedar
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bikidas2060 wrote:

Ipo applications are sold in grey market before listing. People pay hefty sum for it. So, the extra money people pay per share per application is our GMP. 🙂🙂🙂🙂

Are Grey markets illegal? Or legal but just unofficial?

I am also new to Stock market and read a little. People say its legal. Wanted to know if it definitely gives a clearer view of Listing Price on the D Day?

Deal Lieutenant Deal Lieutenant
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Where I can get basic knowledge about IPOs ,reading and seeing news about IPOs everywhere but don’t know what it is, can someone share any article or video url to get info. TIA

Blogger Blogger
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As per insider sources, this Ipo gets delayed. Not even in January possible…

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