Indian Railway Finance Corporation (IRFC) stock was trading firm on Friday with intraday high of Rs 155.69. The stock was trading at Rs 154.5 at the time of publication of this report. The stock has declined by 8.3 percent over the past one month and is quite far from its 52-week high of Rs 229. The PSU stock has given good returns to long and medium term investors.

Today's move in the stock has been due to IRFC board's approval for financing up to ₹700 crore for acquiring 20 BOBR rakes under the General-Purpose Wagon Investment Scheme of the Ministry of Railways. The acquired rakes would help meet the operational requirements of National Thermal Power Corporation. It has also cleared the appointment of Ajoy Choudhury as Chief Risk Officer for two years. Correspondingly, IRFC's financial performance remains strong, with the net profit and revenue seeing moderate growth in the first quarter of 25, hence reiterating its pivotal role in financing India's railway infrastructure.

₹700 crore financing sanctioned for BOBR Rakes

The IRFC board has sanctioned financing of up to ₹700 crore on a finance lease arrangement for 20 BOBR rakes. These rakes have been procured under the General-Purpose Wagon Investment Scheme, one of the strategic schemes by the Ministry of Railways. This financing will directly benefit NTPC, one of the largest power companies in India, augment its logistics, and further strengthen India's coal transportation infrastructure.

Significance of the General-Purpose Wagon Investment Scheme

GPWIS is a very critical program commenced by the Ministry of Railways to incentivize private sector investments in the procurement of specialized wagons. Under this scheme, companies like NTPC get to acquire railway rakes for improving their operational efficiencies while availing favorable financing terms from entities like IRFC. Thus, investment in the BOBR rakes, which are designed for bulk commodities like coal, fits into the program of national energy and infrastructure goals.

Ajoy Choudhury Appointed as Chief Risk Officer

In one significant decision related to key personnel, the IRFC Board approved the appointment of Ajoy Choudhury as Chief Risk Officer on a fixed tenure basis for two years. Choudhury's appointment as CRO comes at an opportune juncture, as risk management would be core for an organization which raises considerable capital to meet the requirements of India's extensive railway network. His role is going to become very important in order to steer the company through potential financial and operational risks.

IRFC Q1FY25 Financial Performance

During Q1FY25, IRFC reported a tepid growth in net profit by 1.65% at ₹1,576.8 crore compared to ₹1,551.3 crore in the corresponding three months period of the previous fiscal. Operations-wise, revenue grew by 1.4% and reached ₹ 6,765.6 crore. This stable financial show underlines IRFC's ability to sustain income at continuous levels irrespective of volatile market conditions.

IRFC's Role in India's Railways Infrastructure

IRFC is a Government-backed entity under the Ministry of Railways and is an important financier in the operation and expansion of one of the largest railway networks in the world. Capital raising through term loans and bonds ensures that financial resources are made available to Indian Railways for sustaining and modernizing its infrastructure. Strong financial performance, besides strategic investments like financing of GPWIS, positions it as a cornerstone in the growth of India's infrastructure.