IRFC to raise ECB loan worth $ 2 billion to finance large infra projects
State-owned Indian Railway Finance Corporation is planning to mobilise $2 billion through external commercial borrowing, primarily in Japanese yen, to fund business growth in the current financial year.
The external commercial borrowing (ECB) is part of the Rs 70,000 crore resource mobilisation plan approved by the board of Indian Railway Finance Corporation (IRFC) for the ongoing financial year.
“We have just signed a loan agreement with the consortium of banks for raising an External Commercial Borrowing loan of JPY equivalent $1.1 billion. Given the pipeline of projects, we expect disbursements within the June quarter itself,” IRFC Chairman and Managing Director Manoj Kumar Dubey said.
The ECB, being raised for JPY equivalent $1.1 billion, has been tied up for a 5-year tenor and benchmarked to Overnight TONAR (Tokyo Overnight Average Rate).
The proceeds from this facility will be utilised towards financing projects with forward or backward linkage with the railway sector or any other project as may be approved by the company in compliance with the ECB guidelines.
This is the first ECB being raised by IRFC during FY27 after it had raised Japanese yen equivalent $700 million across two ECB transactions in FY26.
The public sector undertaking (PSU) of the Ministry of Railways got Navratna status last year and has set a target of crossing Rs 1 lakh crore loan sanction during the current financial year.
“We are aiming for a loan sanction of Rs 1 lakh crore and disbursement of about Rs 40,000 crore during the ongoing financial year, as the pipeline of high-quality infrastructure projects looks strong,” he said.
During FY26, lRFC sanctioned projects worth Rs 72,949 crore and disbursed approximately Rs 35,067 crore, exceeding its annual guidance.
The company witnessed its net worth rising to an all-time high of Rs 56,748 crore and AUM crossing a record high at Rs 4.85 lakh crore.
The diversification-led expansion resulted in improved spreads and a consistent rise in net interest margin (NIM), while lRFC maintained its zero NPA status.
“Our diversification strategy is now translating into stronger spreads, improved margins and enhanced shareholder value, he said, adding that NIM should further improve to 1.65 per cent in FY27 against 1.5 per cent recorded in FY26.
For the financial year ended March 31, 2026, IRFC reported its highest-ever profit of Rs 7,009 crore compared to Rs 6,502 crore in 2024-25, registering a growth of 7.8 per cent.
