IRFC shares gain as NBFC sanctions loans worth over Rs 20,000 crore

Indian Railways Finance Corporation (IRFC) shares gained over 2% on Monday after the NBFC  said it sanctioned three loans worth a total of ₹20,028.51 crore over the weekend.

The stock gained 2.17% to Rs ₹124.55 against the previous close of Rs 121.90 on BSE. Despite the positive movement, IRFC shares are still down over 40% from their July 2023 peak of ₹229. Market participants noted increased trading volumes, underlining renewed investor interest in the wake of the fresh lending decisions.

IRFC approved a rupee term loan of ₹12,640 crore to Chhattisgarh State Power Generation Company Ltd. (CSPGCL), ₹3,388.51 crore to NTPC subsidiary Patratu Vidyut Utpadan Nigam Ltd. (PVUNL), and a further ₹4,000 crore to Talcher Fertiliser. The funding to CSPGCL will support the development of a 2x600 MW super critical thermal power plant at HTPS, Korba West in Chhattisgarh, with the loan ensuring the project has long-term, low-cost financial resources. For PVUNL, the ₹3,388.51 crore assistance is directed at developing the Banhardih coal block in Jharkhand.

IRFC stated, "PVUNL, which is incorporated as a joint venture between NTPC and Jharkhand Bijli Vitran Nigam Ltd, is setting up a 4,000 MW coal-based thermal power plant in Patratu in two phases," IRFC said. 

It further added, "Coal from the block would be transported via the Indian Railways network."

Regarding Talcher Fertiliser, IRFC had announced that it has joined the consortium funding for Talcher Fertilisers' coal gasification urea project in Odisha. The sanctioned ₹4,000 crore is part of a consortium debt arrangement for this project.

The sanctioned loans are expected to provide beneficiary companies with financial stability and enable the timely execution of their respective projects. The funding for CSPGCL supports the Chhattisgarh government's plans for expanding state-owned power generation, while the PVUNL and Talcher Fertiliser loans facilitate critical energy and fertiliser infrastructure. These developments highlight IRFC's ongoing role in supporting large-scale infrastructure and industrial projects through long-term capital provision, reinforcing its position in public sector project financing.