IRFC Full Form - Embibe
  • Written By Team_Embibe
  • Last Modified 26-07-2022
  • Written By Team_Embibe
  • Last Modified 26-07-2022

IRFC Full Form 

The IRFC full form in English is Indian Railways Finance Corporation Ltd, whereas, in Hindi, it stands for भारतीय रेलवे वित्त निगम लिमिटेड. IRFC is owned by the Indian Railways and operates under the administrative control of the Ministry of Railways, Government of India. Furthermore, the organisation raises the financial resources meant for expanding the railways in the country. 

IRFC has been officially categorised as the ‘Mini-Ratna’, one of the country’s prominent public sector undertakings (PSU). Established on December 12, 1986, IRFC began financing the railway sector through market borrowings in 1987-88. Some of the highlight services that the IRFC includes are lending, borrowing, and leasing. 

Mission and Vision 

IRFC aims to become a premier and pivotal financial services company that is solely dedicated to developing the rail transport sector, and it does so while nurturing its symbiotic relationship with the Railway Ministry. The organisation aims to be recognized as the leading financial service company that works towards raising required funds from the capital market. Such funds are raised at a competitive cost to make all the necessary adjustments in the railway plans to ensure maximum profit is generated from the operations. 

IRFC is believed to be lending to the entities mentioned below:

  • Rail Vikas Nigam Limited (RVNL)
  • Railtel
  • Konkan Railway Corporation Limited (KRCL)
  • Pipavav Railway Corporation Limited (PRCL) 

IRFC also aims to expand its borrowing portfolio regarding the current markets, instruments, and investors, which has enabled the company to meet the targeted borrowings every financial year. 

Structure of IRFC 

IRFC was initially incorporated as an exclusive public limited company, and the organisation’s primary business involves financing the overall acquisition of all the rolling stock assets. These assets include powered and unpowered vehicles like coaches, locomotives, trucks, wagons, trollies, cranes & multiple-unit containers etc. The company received its certificate of starting the business on December 23, 1986. It is also registered with the RBI under the specific section 45-IA, which falls under the purview of the RBI Act, which specifies that IRFC is eligible to run the operations of a non-banking financial institution. It could be done without accepting any form of public deposit. 

IRFC is now promoted as the dedicated market borrowing subsidiary of the Indian railways as it has successfully posted its highest revenues to date, going beyond Rs. 6,000 crores. The milestone has been recorded for the financial year 2021-22, and it enabled the company to declare the dividends at a promising rate of Rs 0.63/- against the face value of Rs 10/- for each of the equity shares. IRFC is now committed to expanding & developing the overall Infrastructure Sector, which will have a special focus on the railway sector. 

Objectives of IRFC

Here are some of the main objectives of IRFC: 

  • Mobilising the available resources by way of market borrowings that can be generated from domestic or foreign capital markets. In addition to this, also ensuring that such borrowings are carried out at the most reasonable & competitive rates in alignment with the annual targets laid down by the Ministry of Railways. 
  • To continuously explore the diverse and innovative ways to raise the required funds successfully to reduce the total cost of borrowings to the organisation. 
  • Facilitating the funding on time for the seamless acquisition of the relevant Rolling Stock assets. 
  • Ensuring to facilitate the ever-expanding customer base with customised professional services at a reasonable and competitive cost. It is usually done by leveraging the large size of the company’s business which is a great advantage. 
  • Exploring all the possibilities of financing different entities that work towards refining the existing rail infrastructure while coming up with new prospects for developing the infrastructure. This is how the profitability and future growth are sustained for a long time. 
  • Making judicious and precise use of all the available derivatives and other relevant emerging products to mitigate the risks at the right time and at an optimum cost. 
  • Striving to provide a premium set of services to all the lenders, investors, and financial intermediaries and addressing their problems/grievances with a sense of urgency. 
  • To promote and ensure the optimum utilisation of all the available resources while reducing waste to the most possible extent. 
  • Set up training programs for all the company employees to impart the right knowledge and enhance professionalism. 

Roots and Routes of IRFC 

IRFC is widely renowned as the subsidiary of the Indian Railways and belongs to the financial services industry. Headquartered in New Delhi, IRFC has successfully generated a massive revenue estimated to have already crossed the US$1.8 billion mark. It is believed to be registering exponential growth due to the regular updates in the railway infrastructure and its overall efficiency. Mr Amitabh Banerjee is currently serving as the MD & chairman of the organisation and assumed office in 2019. He also showed a willingness to diversify the organisation’s focus toward non-railway projects. Such projects that have either forward or backward linkage with the overall structure of the Indian Railways will be taken up by the organisation in the near future. 

IRFC is also known for raising money from prominent financial institutions, banking institutions, and financial bonds. The organisation has been in the mainstream media since its initial public offering (IPO). The announcement of the IPO was made on January 18, 2021, which enabled it to get successfully listed on the Bombay Stock Exchange/National Stock Exchange of India. IRFC got listed on the stock exchange on January 29, 2021. Regarding building the robust rail infrastructure, ‘Rail Vikas Nigam’ is the subsidiary body that undertakes such tasks for the Indian railways. 

FAQs on IRFC

Here are some common FAQs on IRFC:

Q.1) What is the full form of IRFC, and when did it come into existence?
A.1) The IRFC full form is Indian Railways Finance Corporation Ltd. It was established on December 12, 1986.

Q.2) Who is the current MD & CEO of IRFC?
A.2) Mr. Amitabh Banerjee was appointed as the MD & CEO of IRFC in 2019.

Q.3) What is the main objective of IRFC?
A.3) IRFC aims to raise funds from the capital markets to improve, develop and construct a robust railway infrastructure across the country. 

Q.4) Where is the headquarters of IRFC, and what kind of services does it provide?
A.4) The headquarters of IRFC is located in New Delhi and provides exclusive services like lending, borrowing, leasing, etc. 

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