September 07, 2008

Indian Railways plans to mop up INR 7,200 crore in 2008-09

It is reported that Indian Railways is planning to mop up INR 7,200 crore funds from the market though Indian Railway Finance Corporation and Rail Vikas Nigam Limited in 2008-09. Thus, in 2008-09, the market mobilization of funds is almost equivalent to the gross budgetary support of INR 7,874 crore.

Indian Railway Finance Corporation would have to raise a record INR 6,907 crore in 2008-09. Rail Vikas Nigam Limited has also been budgeted to raise INR 293 crore in 2008-09.

Indian Railway Finance Corporation mobilizes funds from the market for buying rolling stock and providing it on long term lease to the Indian Railways. In the current fiscal, it budgeted to raise INR 5,000 crore, which has now been lowered to INR 4,750 crore in the revised estimates.

Mr R Kashyap MD of Indian Railway Finance Corporation said that “As on date, we have raised INR 4,250 crore from the domestic market, at weighted average cost of 9.3% in the current fiscal. The average tenor for the borrowings is 10 years.” He added that, till December 2007, it had raised INR 3,200 crore at an average cost of 9.5% and weighted average tenor of 12 years.

In 2006-07 fiscal, Indian Railway Finance Corporation had raised INR 4,000 crore. It had brought down its total cost of borrowing to about 8.22% supported by two bond issues in the external markets. Out of the INR 4,000 crore, it raised INR 2,900 crore from the domestic market and about INR 1,100 crore from the external market.