IRFC , the dedicated financing arm of the Indian Railways, has received a vote of confidence from Moody's Ratings. The international credit rating agency has reaffirmed IRFC's Baa3 credit rating and maintained a stable outlook for the company.

Credit Rating Affirmation

Moody's decision to confirm IRFC's Baa3 rating is a significant development for the company. The Baa3 rating is the lowest investment-grade rating in Moody's long-term corporate obligation rating scale, indicating that IRFC's obligations are subject to moderate credit risk and are considered medium-grade.

Implications of the Rating

The affirmation of the Baa3 rating suggests that Moody's views IRFC as having:

• An adequate capacity to meet its financial commitments
• Moderate credit risk
• Sufficient financial stability, despite potential susceptibility to adverse economic conditions

Stable Outlook

In addition to confirming the Baa3 rating, Moody's has maintained a stable outlook for IRFC. This outlook indicates that the rating agency expects IRFC's credit profile to remain consistent in the near to medium term. A stable outlook typically implies that:

• The company's financial position is likely to remain steady
• There are no foreseeable significant changes that could lead to a rating upgrade or downgrade in the near future

Significance for IRFC

For IRFC, this rating affirmation and stable outlook are important for several reasons:

1. Investor Confidence: It can help maintain or potentially boost investor confidence in the company's financial health and stability.
2. Borrowing Costs: A stable investment-grade rating can positively impact IRFC's ability to access capital markets and potentially lead to favorable borrowing terms.
3. Market Position: It reinforces IRFC's position as a key player in financing the Indian Railways' infrastructure development.

The Baa3 rating from Moody's, coupled with a stable outlook, underscores IRFC's important role in India's railway sector and its ability to manage its financial obligations effectively. As the financing arm of Indian Railways, IRFC's stable credit profile is crucial for the continued development and modernization of India's vast railway network.

Indian Railway Finance Corporation (IRFC), the dedicated financing arm of the Ministry of Railways, has successfully completed a significant refinancing transaction for Bhartiya Rail Bijlee Company Limited (BRBCL). The deal, worth ₹1,125 crore, marks a notable financial move in the railway sector.

Key Details of the Refinancing

Transaction Highlights

The loan agreement was signed at BRBCL's Nabinagar office by Shri Sunil Goel, CGM (BD) of IRFC, and Shri Deepak Ranjan Dehuri, CEO of BRBCL. Senior officials from both organizations were present during the signing ceremony.

Impact and Benefits

This refinancing initiative is expected to yield multiple benefits:

1. Cost Reduction: The refinancing will help lower BRBCL's financing costs, strengthening its financial position.
2. Lower Electricity Costs: As a result, the cost of electricity supplied to Indian Railways is expected to decrease.
3. Win-Win Outcome: The transaction aims to improve BRBCL's bottom line while directly benefiting the Ministry of Railways, both as an equity holder and as the primary customer.

About BRBCL

Bhartiya Rail Bijlee Company Limited, incorporated in 2007, operates the 1,000 MW Nabinagar Thermal Power Project in Bihar. The plant consists of four units of 250 MW each and supplies power under a long-term Power Purchase Agreement (PPA). Notably, 90% of its capacity is dedicated to Indian Railways, while the remaining 10% serves the Bihar State Electricity Board.

IRFC's Expanding Role

IRFC, recently accorded 'Navratna' status, is expanding its role beyond its traditional scope:

• Established in 1986 as the dedicated financing arm of the Ministry of Railways
• Now evolving into a diversified infrastructure financier within the railway ecosystem
• Mandate covers projects with forward and backward linkages to railways, including power generation, transmission, mining, fuel, coal, warehousing, telecom, hotels, catering, metro rail, freight corridors, ports, and multimodal logistics

IRFC's Financial Strength

The corporation continues to maintain a strong asset quality track record with a zero-NPA portfolio, underlining its financial robustness and prudent management.

CMD IRFC's Statement

The Chairman & Managing Director of IRFC commented on the transaction: "IRFC is committed to providing innovative and competitive financing solutions that create a win-win for all stakeholders in the railway ecosystem. This refinancing of BRBCL demonstrates IRFC's continued support to the Indian Railways, true to the very reason for which IRFC was set up – to provide reliable financial support to the Indian Railways. Building on this legacy, IRFC is now extending its support to entities within the railway ecosystem, ensuring long-term synergies, cost-effectiveness, and financial sustainability for the sector."

This refinancing transaction exemplifies IRFC's commitment to supporting railway-linked entities, fostering synergies within the railway ecosystem, and ensuring cost-effectiveness and financial sustainability of projects that directly serve the Railways' operational requirements.