Indian Railway Finance Corporation (IRFC) IPO opens today: 10 things to know

Marco Green
January 18, 2021

IRFC has become the first company to launch an initial public offering (IPO) this calendar. The IPO will close on January 22. IRFC is issuing shares at a price band of Rs 25 to Rs 26.

The company has already raised Rs 1,390 crore of its total issue size of Rs 4,633 crore, through the anchor book. The shares are likely to be listed on the BSE Sensex and NSE Nifty on February 2, 2021. It comprises of a fresh issue of 118.80 crore equity shares and an offer-for-sale of up to 59.40 crore shares.

The bids for the issue can be made for a minimum of 575 equity shares and in multiples thereafter. It produces a range of decorative paints and has three manufacturing facilities in Rajasthan, Kerala and Tamil Nadu.

Edelweiss Financial Services, ICICI Securities and Kotak Mahindra Capital Company are the lead managers of Indigo Paints IPO. The application money per stands at Rs 14,950 at Rs 26 per share. Further, given its strong relationship with MoR, the company maintains a low risk profile. We argue investors should look at this IPO offer only with a long term perspective wherein it can deliver healthy returns on investment. For FY18-20, revenue grew at a CAGR of 21% while PAT grew by 26% CAGR. We expect the company to post strong growth driven by capex by Indian railways along with stable margins due to cost plus model. On the valuation front, IRFC is valued at one time September 2020 book value per share. Over the last 3 decades, IRFC has played a significant role in supporting the capacity enhancement of the Indian Railways by financing a proportion of their annual plan outlay.

Market players said the grey market premium for the IRFC IPO has dropped below 10 per cent amid weakness in the secondary market.

They also said that the IPO is attractively priced and can be a good bet for conservative long-term investors as the company is seen reporting consistent growth numbers in the past.

Other reports by Click Lancashire

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