IRFC Plans USD 2 Billion ECB Fundraise To Support Infrastructure Financing

New Delhi, May 25 (KNN) State-owned Indian Railway Finance Corporation (IRFC) is planning to raise around USD 2 billion through external commercial borrowings (ECBs), primarily in Japanese yen, as part of its strategy to support business expansion and infrastructure financing during the current financial year.

The proposed fundraising forms part of IRFC's Rs 70,000 crore resource mobilisation programme approved by its board for FY27.

Speaking to PTI, IRFC Chairman and Managing Director Manoj Kumar Dubey said the company has already signed a loan agreement with a consortium of banks to raise a Japanese yen-denominated ECB equivalent to USD 1.1 billion.

"We have just signed a loan agreement with the consortium of banks for raising an External Commercial Borrowing loan of JPY equivalent to USD 1.1 billion. Given the pipeline of projects, we expect disbursements within the June quarter itself," Dubey said.

First FY27 ECB Deal Backed by Strong Project Pipeline 

The five-year ECB facility is benchmarked to the Tokyo Overnight Average Rate (TONAR). The funds will be deployed towards financing projects linked directly or indirectly to the railway sector, along with other eligible projects in accordance with prevailing ECB guidelines.

This marks IRFC's first ECB transaction in FY27, following the successful raising of Japanese yen-denominated borrowings equivalent to USD 700 million through two separate ECB transactions during FY26.

Having secured Navratna status last year, IRFC is now pursuing an ambitious growth agenda and has set a target of sanctioning loans worth more than Rs 1 lakh crore during the ongoing financial year.

According to Dubey, the company expects to disburse approximately Rs 40,000 crore in FY27, supported by a robust pipeline of infrastructure projects.

"We are aiming for a loan sanction of Rs 1 lakh crore and disbursement of about Rs 40,000 crore during the ongoing financial year, as the pipeline of high-quality infrastructure projects looks strong," he said.

Record Financial Performance Strengthens Expansion Plans 

IRFC's lending activity witnessed strong momentum in FY26, with project sanctions reaching Rs 72,949 crore and disbursements touching approximately Rs 35,067 crore, surpassing the company's annual guidance.

The company also reported significant financial growth during the year. Its net worth rose to a record Rs 56,748 crore, while assets under management (AUM) crossed an all-time high of Rs 4.85 lakh crore.

The PSU's diversification strategy has contributed to improved spreads and higher profitability. IRFC maintained its zero non-performing asset (NPA) status while recording a steady improvement in its net interest margin (NIM).

Dubey said the company's NIM is expected to increase further to 1.65 percent in FY27 from 1.5 percent in FY26, reflecting the benefits of diversification and improved asset quality.

For the financial year ended March 31, 2026, IRFC posted its highest-ever profit after tax of Rs 7,009 crore, compared to Rs 6,502 crore in the previous fiscal, registering a growth of 7.8 percent.

The planned overseas fundraising and expansion of the loan book are expected to strengthen IRFC's role in financing railway and infrastructure projects while supporting the government's broader infrastructure development agenda.

(KNN Bureau)