The Hindu reported that Indian Railways Finance Corporation the fund raising arm of the Indian Railways will mobilize INR 5,500 crore to INR 6,000 crore in the remaining 2 weeks of the current fiscal from the domestic market.
Funds raised by IRFC are used to pay for buying locomotives, wagons and coaches for Indian Railways.
Mr Rajiv Datt MD of IRFC said that “From the total fund mobilizing target for the current fiscal of about INR 15,000 crore we have to raise about INR 5,500 to 6000 crore. We will do that before the current fiscal ends and make available to Indian Railways.”
IRFC raised about INR 7,000 crore through its tax free bond issues in the current fiscal which is INR 3,000 crore short of the INR 10,000 crore permitted to IRFC through tax free bonds for the fiscal.
This was because all organizations with permissions for tax free bond issues hit the market after December 2012 in effect reducing the time window when firms could raise money. As a result many firms have not been able to mobilize money from the market.
Last week 9 firms including India Infrastructure Finance Corporation Ltd, IRFC, Dredging Corporation, Ennore Port and JN Port were vying to raise money through tax free bonds. NHAI did not even hit the market to raise funds as it had not spent the money raised in previous fiscal.
Meanwhile Indian Railways plans to approach the Finance Ministry to raise at least INR 10,000 crore through tax free bonds in the next financial year.
Railways’ Financial Commissioner Mr Vijaya Kanth said that “We have not firmed up the exact amount that we will seek from the Finance Ministry. But at the minimum we would like to ask the Ministry to maintain the INR 10,000 crore limit.”