Indian Railway Finance Corporation Limited (IRFC) Tax Free Bond Feb 2014 Interest Rate up to 8.88% pre tax rate up to 13.43%
The primary objective of IRFC (Indian Railway Finance Corporation Ltd.) is to act as a financing arm for the Indian Railways.The development of the Company’s business is dependent on the MoR’s (Ministry of Railways) strategy concerning the growth of the Indian Railways. The MoR is responsible for the acquisition of rolling stock and for the improvement, expansion and maintenance of the railway infrastructure. The Company is responsible only for raising the finance necessary for the acquisition of rolling stock ordered by the MoR. The Company’s principal business therefore is borrowing funds from the commercial markets to finance the acquisition of new rolling stock which is then leased to the Indian Railways. Lease rentals represent the Company’s capital recovery plus the cost plus a net interest margin. A part of the funds so raised are also utilised for funding bankable projects (i.e. such projects or proposals that have sufficient collateral, future cash flows and high probability of success) approved by the MoR and which are executed by Rail Vikas Nigam Limited (“RVNL”).