Indian Railway Finance Corporation Limited (IRFC) has signed a loan agreement with a consortium of lenders to raise External Commercial Borrowings (ECBs) amounting to JPY equivalent USD 1.1 billion. The agreement was signed on May 21, 2026, in New Delhi, marking the first ECB raised by the company in the fiscal year 2026-27. This follows the successful raising of JPY equivalent USD 700 million across two ECB transactions in FY 2025-26.

Loan Details

The borrowing has been arranged for a tenor of 5 years and is benchmarked to the Overnight TONAR (Tokyo Overnight Average Rate). The facility is unsecured, and the loan amount in JPY is yet to be availed. The aggregated amount outstanding under the facility stands at JPY equivalent USD 1.1 billion.

Lender Consortium

The loan agreement involves a consortium of four major financial institutions:

Utilization of Proceeds

The proceeds from this facility will be utilized towards financing projects that have a forward or backward linkage with the railway sector. Alternatively, the funds may be used for any other project approved by the company in compliance with the ECB Guidelines.

Management Commentary

Manoj Kumar Dubey, Chairman and Managing Director & CEO of IRFC, stated that the continuous endeavour is to mobilise resources through diversified avenues at competitive rates. He highlighted that this transaction reinforces investor confidence in IRFC’s financial fundamentals and will contribute to optimizing the weighted average borrowing cost. The ECB team was led by Deepa Kotnis, ED/Finance.

Indian Railway Finance Corporation has outlined an ambitious growth roadmap, targeting assets under management (AUM) of ₹5 trillion by the first half of FY27, up from ₹4.85 trillion in FY26. The company also reiterated expectations of double-digit growth in both profit and revenue for FY27, while projecting loan margins of 220-250 basis points for new ventures and an estimated net interest margin (NIM) on total assets of approximately 1.65% by FY27, as disclosed during its latest concall update.

FY26 Performance Highlights

The company reported record sanctions and disbursements for the financial year ended March 31, 2026. IRFC sanctioned assets worth ₹74,000 crores against a guidance of ₹60,000 crores, while disbursements reached ₹35,000 crores, surpassing the initial target of ₹30,000 crores. The management highlighted that these figures represent the highest numbers in the company's history, with net profit crossing the ₹7,000 crores mark and net worth growing to over ₹56,000 crores.

AUM Growth Target

IRFC has set a clear milestone for its asset base expansion. The company's management communicated the following AUM trajectory during the concall:

FY27 Financial Guidance

Alongside the AUM target, IRFC's management communicated expectations of double-digit increases in both top-line revenue and bottom-line profit for FY27. The company also provided specific margin guidance, projecting loan margins of 220-250 basis points for new ventures and an estimated NIM on total assets of approximately 1.65% by FY27. The key guidance parameters shared during the concall are summarised below:

The forward guidance reflects management's confidence in the company's near-term financial performance and its assessment of business prospects for the fiscal year. The margin and NIM projections provide additional quantitative context to the directional double-digit growth guidance previously communicated.