Railway company refinances Rs 2,539 crore for Angul Sukinda Railway to enhance project viability and expansion

The Indian Railway Finance Corporation Limited (IRFC), a 'Navratna' Schedule-A Public Sector Enterprise under the Ministry of Railways, Government of India, has executed a significant refinancing facility. IRFC, registered with RBI as a non-deposit taking Non-Banking Finance Company (NBFC) and Infrastructure Financing Company (IFC), formalised a loan document of Rs 2,539 crore for Angul Sukinda Railway Limited (ASRL). The agreement was signed by Mr. Dilip Kumar Samantray, Managing Director of ASRL and Ms. Deepa Kotnis, Executive Director (Finance) of IRFC.

Established in 1986 as the dedicated financing arm of the Ministry of Railways, IRFC has been instrumental in bolstering India's rail infrastructure by mobilising resources at competitive rates. Recently granted 'Navratna' status, the company is expanding its purview to become a diversified infrastructure financier within the broader railway ecosystem. Its mandate now encompasses projects with forward and backwards linkages to railways, including sectors like power generation and transmission, mining, fuel, warehousing, telecom, metro rail, freight corridors and multimodal logistics. IRFC maintains a robust financial standing, evidenced by its zero-NPA portfolio.

ASRL, a Special Purpose Vehicle (SPV) within the railway ecosystem, is promoted by Rail Vikas Nigam Limited (RVNL), Container Corporation of India Ltd. (CONCOR), the Government of Odisha and private partners. It operates a crucial 113.4 km broad-gauge railway line in Odisha. This line serves as a strategic freight corridor, connecting mineral-rich belts to major coal, steel, power and port facilities. By enabling faster and more efficient transportation of essential commodities like coal, iron ore and steel, the line helps reduce congestion on existing routes and significantly enhances supply chain efficiency for industries across the region.

The refinancing package from IRFC provides ASRL with customised financial support through more competitive terms and a repayment structure aligned with the project's actual revenue cycles. This strategic intervention is designed to enhance ASRL's ability to meet its financial commitments and free up resources for future expansion, capacity enhancement and operational improvements. Ultimately, this move is expected to bolster the long-term viability of the Angul Sukinda Railway project, ensuring its continued significant contribution to regional economic growth and the nation's overall rail freight capacity.

The company has a market cap of Rs 1.65 lakh crore. The stock is up by 18 per cent from its 52-week low of Rs 108.05 per share and has given multibagger returns of 490 per cent in 3 years.

Disclaimer: The article is for informational purposes only and not investment advice.