IRFC to raise ECB loan worth $2 billion to finance large infra projects

Indian Railway Finance Corporation (IRFC), a state‑owned entity, intends to raise $2 billion through external commercial borrowings, mainly in Japanese yen, to support its growth initiatives in the current fiscal year.

The external commercial borrowing (ECB) forms part of the ₹70,000 crore resource‑mobilisation programme sanctioned by the IRFC board for the ongoing financial year.

“We have finalized a loan arrangement with a bank consortium for an ECB equivalent to USD 1.1 billion in Japanese yen. In view of the project pipeline, we anticipate the funds will be drawn down during the June quarter,” said Manoj Kumar Dubey, Chairman and Managing Director of IRFC, speaking to PTI.

The ECB, amounting to the JPY equivalent of $1.1 billion, is structured for a five‑year term and is linked to the Overnight TONAR (Tokyo Overnight Average Rate) as its reference rate.

The proceeds from this facility will be directed toward financing projects that have forward or backward linkages with the railway sector, or any other initiative approved by the company in accordance with ECB regulations.

This marks the first ECB raised by IRFC in FY 2027; in FY 2026 the corporation secured two yen‑denominated ECBs totalling the equivalent of $700 million.

The Ministry of Railways‑owned public sector undertaking, which attained Navratna status last year, has set a goal to sanction loans exceeding ₹1 lakh crore in the current financial year.

“We are targeting a loan sanction of ₹1 lakh crore and a disbursement of roughly ₹40,000 crore this year, given the robust pipeline of high‑quality infrastructure projects,” he added.

In FY 2026, IRFC sanctioned projects worth ₹72,949 crore and disbursed about ₹35,067 crore, surpassing its annual guidance.

The corporation’s net worth reached an all‑time high of ₹56,748 crore, while assets under management (AUM) climbed to a record ₹4.85 lakh crore.

The diversification‑led expansion has improved spreads and steadily lifted the net interest margin (NIM), with IRFC maintaining a zero‑non‑performing‑asset (NPA) status.

“Our diversification approach is now delivering stronger spreads, higher margins and greater shareholder value,” he remarked, noting that NIM is expected to rise to 1.65 percent in FY 2027 from 1.5 percent in FY 2026.

For the fiscal year ending March 31 2026, IRFC posted its highest ever profit of ₹7,009 crore, up from ₹6,502 crore in 2024‑25, reflecting a 7.8 percent increase.

Published on May 24, 2026