New Delhi: State-run Indian Railway Finance Corporation (IRFC) has signed a loan agreement with a consortium comprising Sumitomo Mitsui Banking Corporation (GIFT City Branch) and MUFG Bank Ltd (GIFT City Branch) to raise an External Commercial Borrowing (ECB) of JPY equivalent to USD 400 million.
The agreement was executed in New Delhi and disclosed under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Second Overseas Borrowing in FY 2025–26
This marks IRFC’s second ECB transaction in the financial year 2025–26. In December 2025, the company had raised JPY equivalent USD 300 million from overseas markets, signaling its strong access to global capital pools.
With the latest USD 400 million equivalent facility, IRFC continues to diversify its funding base and strengthen its international borrowing profile.
Key Terms of the Loan Agreement
The major highlights of the transaction include:
- Facility Size: JPY equivalent USD 400 million
- Tenor: 5 years
- Benchmark: Overnight TONAR (Tokyo Overnight Average Rate)
- Security: Unsecured
The unsecured nature of the facility reflects investor confidence in IRFC’s financial strength and credit profile.
Funds to Support Railway and Infrastructure Projects
According to the company, the proceeds from the ECB will be utilized for financing projects that have forward or backward linkages to the railway sector, along with other approved projects in compliance with prevailing ECB guidelines.
The move is expected to enhance IRFC’s ability to support modernization and expansion initiatives across India’s railway infrastructure ecosystem.
Strengthening Global Capital Market Presence
The loan agreement was signed by Nav Goel, General Manager (Finance), IRFC, along with Manoj Kaushik, Executive Director, SMBC, and Parul Shah, Head IBU, MUFG.
Speaking on the development, IRFC Chairman and Managing Director & CEO Manoj Kumar Dubey said that diversified funding sources are strategically important for the company. He noted that after the successful re-entry into the ECB market in December 2025, this fresh USD 400 million equivalent borrowing further reinforces investor confidence in IRFC’s financial fundamentals and long-term growth vision.
He emphasized that the transaction will help optimize IRFC’s weighted average borrowing cost, deepen engagement with global investors, and strengthen its capacity to fund large-scale railway infrastructure projects.
Boost to India’s Railway Modernization Drive
As Indian Railways continues to expand network capacity, upgrade rolling stock, and enhance logistics efficiency, access to competitive global financing remains crucial. IRFC’s ability to tap international capital markets at benchmark-linked rates underscores its growing credibility among global lenders.
About IRFC
Indian Railway Finance Corporation is the dedicated financing arm of Indian Railways and a listed public sector enterprise under the Ministry of Railways. The company plays a pivotal role in mobilizing funds for railway infrastructure, rolling stock acquisition, and related projects, ensuring sustained financial support for one of India’s most critical growth engines.
