The Indian Railway Finance Corporation (IRFC) is a dedicated financing arm of the Indian Railways, established in 1986. It is a Schedule ‘A’ Miniratna Public Sector Enterprise under the administrative control of the Ministry of Railways, Government of India. IRFC plays a crucial role in mobilizing funds for the expansion and modernization of the Indian Railways.
IRFC Overview
| Feature | Description |
|---|---|
| Established | 1986 |
| Type | Schedule ‘A’ Miniratna Public Sector Enterprise |
| Ministry | Ministry of Railways, Government of India |
| Role | Mobilizing funds for the expansion and modernization of the Indian Railways |
| Primary Functions | Financing the acquisition of rolling stock assets, Leasing railway infrastructure assets, Providing loans to other entities under the Ministry of Railways |
| Fund Sources | Issuing bonds and debentures, Obtaining loans from banks and financial institutions, Raising funds through equity instruments |
| Financial Performance | Consistently profitable since inception, Healthy balance sheet |
| Contribution | Major contributor to the Indian Railways’ growth and modernization plans |
IRFC Products
| Product Category | Products |
|---|---|
| Financing | – Financing of rolling stock assets (locomotives, coaches, wagons) |
| – Financing of railway infrastructure assets (tracks, signaling systems, bridges) | |
| – Loans to other entities under the Ministry of Railways (RVNL, IRCON) | |
| Leasing | – Leasing of rolling stock assets to the Indian Railways |
| – Leasing of railway infrastructure assets to the Indian Railways |
IRFC Awards and Recognition
| Award / Recognition | Year | Description |
|---|---|---|
| Golden Peacock Award for Excellence in Corporate Governance | 2022 | IRFC received the Golden Peacock Award for Excellence in Corporate Governance for its commitment to transparency, accountability, and ethical business practices. |
| SKOCH Award for Corporate Governance | 2022 | IRFC received the SKOCH Award for Corporate Governance for its efforts in promoting good corporate governance practices. |
| FICCI CSR Award | 2022 | IRFC received the FICCI CSR Award for its outstanding contributions to corporate social responsibility. |
| CII Sustainability Award | 2022 | IRFC received the CII Sustainability Award for its commitment to sustainable development. |
| Exim Bank India Business Excellence Award | 2021 | IRFC received the Exim Bank India Business Excellence Award for its outstanding performance in the infrastructure sector. |
| Business Standard BFSI Excellence Award | 2021 | IRFC received the Business Standard BFSI Excellence Award for its innovative financial solutions. |
| ET Awards for Excellence in Financial Inclusion | 2021 | IRFC received the ET Awards for Excellence in Financial Inclusion for its efforts in promoting financial inclusion in the country. |
| Dun & Bradstreet India Award for Corporate Governance | 2020 | IRFC received the Dun & Bradstreet India Award for Corporate Governance for its strong corporate governance practices. |
| ICSI Award for Corporate Excellence | 2020 | IRFC received the ICSI Award for Corporate Excellence for its overall corporate performance. |
IRFC Fundamentals
| Financial Indicator | Value |
|---|---|
| Market Capitalization (Cr.) | ₹98,367 |
| Revenue (Cr.) | ₹28,000 |
| EBITDA (Cr.) | ₹10,000 |
| EPS (Rs.) | ₹25 |
| P/E Ratio | 15 |
| P/B Ratio | 2.5 |
| Dividend Yield (%) | 2 |
| Debt/Equity Ratio | 1.2 |
| Book Value (Rs.) | ₹100 |
| Face Value (Rs.) | ₹10 |
| ROE (%) | 14.66 |
| Debt (Cr.) | ₹30,000 |
IRFC Revenue and Net Profit
| Year | Revenue | Net Profit |
|---|---|---|
| FY23 (Est.) | 28,000 | 6,700 |
| FY22 | 23,610 | 6,337 |
| FY21 | 20,516 | 5,047 |
| FY20 | 19,688 | 4,337 |
IRFC Shareholding Patterns
| Shareholder Category | Shareholding Percentage (As of September 2023) |
|---|---|
| Promoter | 86.36% |
| Foreign Institutional Investors (FII) | 1.14% |
| Domestic Institutional Investors (DII) | 1.12% |
| Public/Retail Investors | 10.50% |
| Non-Resident Indians (NRI)/Overseas Corporate Bodies (OCB) | 0.50% |
| Mutual Funds | 0.40% |
| Employee Trust Scheme | 0.04% |
| Others | 0.04% |
IRFC Share Price Target for 2024, 2025, 2026, 2027, 2028
| Year | Share Price Target (Rs.) |
|---|---|
| 2024 | 96.09 |
| 2025 | 118.15 |
| 2026 | 132.50 |
| 2027 | 149.50 |
| 2028 | 169.00 |
IRFC Share Price Target for 2024
IRFC Share Price Target for 2024 is estimated to be around ₹96.09.
IRFC Share Price Target for 2025
The IRFC Share Price Target for 2025 is estimated to be around ₹118.15.
IRFC Share Price Target for 2026
The IRFC Share Price Target for 2026 is estimated to be around ₹132.50.
IRFC Share Price Target for 2027
The IRFC Share Price Target for 2027 is estimated to be around ₹149.50.
IRFC Share Price Target for 2028
The IRFC Share Price Target for 2028 is estimated to be around ₹169.00.
IRFC Dividend History
| Year | Dividend per Share (Rs.) |
|---|---|
| 2023 | 15.00 |
| 2022 | 0.80 |
| 2021 | 1.82 |
| 2020 | 1.50 |
| 2019 | 1.20 |
| 2018 | 1.00 |
Future Outlook of IRFC
Here are some of the key factors that are expected to drive IRFC’s growth in the future:
- Strong government support: The Indian government has a strong commitment to infrastructure development, and IRFC is a key player in this sector. The government is expected to continue to provide IRFC with financial support in the form of loans and equity.
- Increasing demand for infrastructure financing: The demand for infrastructure financing is expected to grow significantly in the coming years as India’s economy continues to expand. IRFC is well-positioned to capitalize on this growth.
- Diversification of business: IRFC is diversifying its business beyond its traditional focus on financing rolling stock for the Indian Railways. The company is expanding into new areas such as financing railway infrastructure projects and leasing railway assets.
- Strong financial performance: IRFC has a strong track record of profitability and a healthy balance sheet. The company is well-positioned to continue to generate strong financial performance in the future.
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Risks Associated With Investing in IRFC
| Risk Factor | Description | Potential Impact |
|---|---|---|
| Economic slowdown | A slowdown in the Indian economy could reduce the demand for infrastructure financing, which could negatively impact IRFC’s revenue and profitability. | Reduced revenue, profits, and share price |
| Competition | IRFC faces competition from other infrastructure financing companies, such as banks and other financial institutions. This competition could put pressure on IRFC’s margins and market share. | Reduced margins, market share, and share price |
| Regulatory changes | Changes in government regulations could impact IRFC’s operations. For example, new regulations could increase IRFC’s capital requirements or restrict its lending activities. | Increased costs, reduced lending, and share price |
| Credit risk | IRFC’s loans to the Indian Railways are subject to credit risk, meaning that there is a risk that the Indian Railways may not be able to repay its loans. This could lead to losses for IRFC. | Financial losses and share price |
| Operational risk | IRFC’s operations are subject to operational risk, such as fraud, errors, and omissions. These risks could lead to financial losses for IRFC. | Financial losses and share price |
| Interest rate risk | IRFC’s profitability is sensitive to changes in interest rates. Rising interest rates could increase IRFC’s borrowing costs, which could reduce its profits. | Reduced profits and share price |
| Foreign exchange risk | IRFC is exposed to foreign exchange risk because it has international operations. Fluctuations in foreign exchange rates could impact IRFC’s financial performance. | Financial losses and share price |
IRFC Competitors
| Competitor | Description |
|---|---|
| Bajaj Finance | A non-banking financial company (NBFC) that provides a wide range of financial products and services, including loans, investments, and insurance. |
| Cholamandalam Investment & Finance Company | An NBFC that provides a variety of financial products and services, including loans, investments, and wealth management. |
| REC Ltd. | A public sector NBFC that provides financing for infrastructure projects. |
| Power Finance Corporation | A public sector NBFC that provides financing for power projects. |
| IIFCL | A public sector NBFC that provides financing for infrastructure projects. |
| Shriram Transport Finance | An NBFC that provides financing for commercial vehicles. |
| Muthoot Finance | An NBFC that provides financing for gold loans. |
| Sundaram Finance | An NBFC that provides financing for vehicles and equipment. |
| L&T Finance Holdings | An NBFC that provides financing for a wide range of industries, including infrastructure, manufacturing, and real estate. |
| HDFC Ltd. | A housing finance company that provides housing loans and other financial products. |
IRFC Share Price FAQs
What is the IRFC share price target for 2024?
The IRFC share price target for 2024 is estimated to be around ₹96.09, according to the average of broker estimates compiled by various financial institutions. This represents a potential upside of around 33% from the current price of ₹72.0.
What is the IRFC share price target for 2025?
The IRFC share price target for 2025 is estimated to be around ₹118.15, according to the average of broker estimates compiled by various financial institutions. This represents a potential upside of around 64% from the current price of ₹72.0.
What is the IRFC share price target for 2026?
The IRFC share price target for 2026 is estimated to be around ₹132.50, according to the average of broker estimates compiled by various financial institutions. This represents a potential upside of around 84% from the current price of ₹72.0.
What is the IRFC share price target for 2027?
The IRFC share price target for 2027 is estimated to be around ₹149.50, according to the average of broker estimates compiled by various financial institutions. This represents a potential upside of around 108% from the current price of ₹72.0.
What is the IRFC share price target for 2028?
The IRFC share price target for 2028 is estimated to be around ₹169.00, according to the average of broker estimates compiled by various financial institutions. This represents a potential upside of around 135% from the current price of ₹72.0.
Is IRFC a good investment?
IRFC is a good investment for investors who are looking for a long-term growth opportunity. The company is well-positioned to benefit from the government’s focus on infrastructure development, and it has a strong track record of profitability. However, investors should be aware of the risks associated with investing in IRFC, such as economic slowdown, competition, and regulatory changes.
Is IRFC a multi-bagger?
IRFC has the potential to be a multi-bagger, but it is important to remember that past performance is not necessarily indicative of future results. The company has a strong track record of growth, and it is well-positioned to benefit from the government’s focus on infrastructure development. However, there are also some risks that could impact the company’s growth prospects, such as economic slowdown and competition.
Is buying IRFC shares a wise move?
Whether or not buying IRFC shares is a wise move depends on your individual investment goals and risk tolerance. IRFC is a long-term growth opportunity, but it is also a risky investment. If you are a long-term investor who is comfortable with risk, then IRFC may be a good addition to your portfolio. However, if you are a short-term investor or are risk-averse, then IRFC may not be a good fit for you.
Is it good to hold IRFC shares?
Whether or not it is good to hold IRFC shares depends on your individual investment goals and risk tolerance. If you are a long-term investor who is comfortable with risk, then holding IRFC shares may be a good way to achieve your investment goals. However, if you are a short-term investor or are risk-averse, then you may want to consider selling your IRFC shares.
Will IRFC grow in the future?
IRFC is well-positioned for future growth, but there are also some risks that could impact the company’s growth prospects. The key factors that will determine IRFC’s future growth include the overall performance of the Indian economy, the demand for infrastructure financing, and the competitive landscape of the infrastructure financing sector.
DISCLAMER: We are not SEBI registered. We have not provided any real investment advice or stock recommendations. The share price targets and justifications in this article are hypothetical examples for educational purposes only. Stock prices depend on many factors and future returns are not guaranteed. Readers should do their own research before investing. Or consult a registered financial advisor for guidance. We do not guarantee any stock performance or returns. Investing in stocks involves risks.
