INDIAN RAILWAY FINANCE CORP (NSE: IRFC) Q4 2026 Earnings Call dated May. 15, 2026
Corporate Participants:
Manoj Kumar Dubey — Chairman & Managing Director
Unidentified Speaker
Randhir Sahay — Executive Director Finance
Analysts:
Manish Agarwalla — Analyst
Mohit Jain — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Indian Railway Finance Corporation Limited Q4 and FY26 earnings call hosted by Philip Capital India Private Limited. As a reminder, all participant lines will be on the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Manish Agarwal from Philip Capital India Private Limited. Please go ahead.
Manish Agarwalla — Analyst
Yeah. Good morning and welcome to Q4 and full year FY26 earnings call of Indian Railway Finance Corporation. We have with us Sri Manoj Kumarji Dubey, Chairman and MB CEO accompanied by Sri Randhir Sahai, Director of Finance and CFO and other senior member from the team. Now I request Mr. Dube to share his thoughts on the quarter and financial year gone by and provide us with an outlook going forward. Over to you sir.
Manoj Kumar Dubey — Chairman & Managing Director
Good morning Manish. And good morning everyone who is joining the con call. Good morning from the whole team of irfc. It’s a very auspicious and happy day for us. We started on our new journey of diversification which we typically call IRSC 2.0. When we started FY26 last year on the 1st of April, the highlights of starting on those days was one that we had been conferred Noratna status and at the same time we had promised to the investors and our shareholders that we are embarking on a new journey of diversification which is going to take company on a different trajectory of growth every quarter we promise something and I’m very happy that today when we closed our financial year and we are out with the official numbers, number one for any management, the first thing is to be tested on their statement that they have made.
I’m very happy to share that we promised with a guidance that we will be sanctioning more than 60,000 crore of assets and we’ll be disbursing nearly 30,000 crore over the year. It was a difficult task for the fact that there was no pipeline for this company. As you know for the railways, whatever was assigned it was disbursed in the same year. So when we started FY26 there was zero pipeline. So the challenge of the team of RC was to create a pipeline as well as disburse it. So typically against what we give the guidance of 60,000 crore, we crossed the mark or we reached the mark of nearly 74,000 crore for the year in terms of sanction of assets and against the guidance of 30,000 crores for disbursement we could do around 35,000 crores.
That is heartening that as a management what we spoke, what we promised, what we gave as a guidance we could surpass that now. Morning source the days as you say, as we all say now when we are embarking on next FY for this new journey 2.0 we are obviously a little relaxed in the manner that we are confident that what we propose to do for the growth of the company we are more confident to it. We are not relaxed for the fact that growth will come on sown. We have to work for that. Numbers as you see overall numbers for the year, financial year all the parameters are shown is highest in the history of the company be it the revenue, it is highest for the company in all the years together Pat again it is highest.
We have crossed the magic figure of 7,000 crore this year. Our net worth is consistently growing from 52 odd thousand crore. Now it is 56,000 odd crore plus. The biggest indicator is the net interest margin. And we feel that we are at the sweet spot for the fact that all these years we worked on a flat name because the margins from India really was fixed. This is the first year for IRFC when it tested the success of getting higher margins. Despite chasing the best quality assets through RFPs and competition.
Despite the fact that we competed and won the bids. My margins are quite higher than what we used to get from the railways. And that is having a very positive impact on my name going forward. To summarize all the indicators that is top line, bottom line, net worth, my net interest margin, my EPS we have given a target to ourselves in the FY27 and going forward we should grow in double digit. In fact that was a target that we gave to us for the profit last year and end of the year we ended up around 8%.
Quarter four was little flat or subdued from the fact that there were some provisions to be made because for the railway asset there was no system of provisioning because it was sovereign asset. But when the funding to even CPS or the state governments in the ecosystem of OLU government approach still as per IBI guidelines provisions as we made there are more expenditure in CSR in the last quarter. It happens typically so taken altogether Q4 pad is flat. But revenue has shown the green shoots and very high uptrend of 9% which is matching to our aspirations going forward that our top line also in FY27 should grow handsomely, maybe touching more than 10% also.
And this will start showing right from the Q1 on these notes. We are not putting in numbers as a guidance for FY27. What we have decided that whatever we achieved last year which was around 75,000 crore of sanction on assets and nearly 35,000 crore of disbursement, that should be the benchmark going ahead. And management is very confident that going ahead there has to be things going positive on these lines. We will be surpassing these numbers in this current year also. Quarter after quarter it will unfold how the story is going to pick up the strength.
The last comment is on asset under management which is the key indicator for the kind of business sustained business company is doing. You see for the last three years the asset under management for the company was flattish hovering around 4.6 lakh crore. This year as you see on net basis, when I talk net basis then it takes care of all the repayments that came from the Indian Railways towards the older loans on net basis. On the end of the year the asset under management has grown to 4.85 lakh crore.
So going forward we expect that in the year in the FY27 the magic figure of 5 lakh crore for AUM we should touch sometime in H1. Maybe agree to that. Let us see. Overall, despite the geopolitical situation prevailing all over the world, we feel that the capex story of India is fully intact. The dreams of Hon. Prime Minister for Bikasi Bharat is right in the place and complementing that next 5 to 10 years perspective for Indian LA Finance Corporation. When we are targeting whole of government approach for capex financing, we are on the right track and we will be having consistent growth.
Thank you.
Mohit Jain — Analyst
Members. Should we start the
Operator
Question and answer?
Manish Agarwalla — Analyst
Just go ahead.
Operator
Thank you. Thank you very much. We’ll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone phone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question is from the line of Nilesh Chitani from BOI Mutual Funds. Please go ahead.
Unidentified Speaker
Hi, good morning team and once again congratulations on. Sorry
Operator
To interrupt sir, your voice is very low. Can you get the headset handset near?
Unidentified Speaker
Yeah. Hi, good morning. Can. Is my line better now?
Operator
Yes, yes it’s much better. Thank you. You can go Ahead.
Unidentified Speaker
Okay. Hi. First of all congratulations to the team IRFC for a great set of numbers. My first question was on the sanction numbers at the end of FY26. What is that? And going ahead, what does the pipeline look like for sanction numbers? And second question, follow up to that is on the current sanction numbers what can be the expected disbursements in your prima facie expectations for FY27?
Questions and Answers:
Manoj Kumar Dubey
Thank you Nilesh. So as the number goes, we started with zero pipeline or say very small pipeline of 3,500 crore. When we did only one deal before the FY started this year we sanctioned nearly 74,000 crore of assets in FY26. Disbursement stands at nearly 35,000 crore. It has few marquee deals of refinances. One very important deal that we did with the dedicated freight rail corridor that is our sibling company where we refinance a loan of World bank of nearly 10,000 crore. Second market deal was with the joint venture project promoted by our Maharatna siblings NTPC, IOCL and Coal India that is Hindustan Urwarak Rasayan Limited that we did our Q4 that was more than 12,000 crore refinancing deal that we did.
Apart from that we did a few deals in Genco side NTPC also we did with their subsidiaries directly on the NTPC balance sheet also taking all together we crossed the mark of 35,000 crore disbursement going ahead this year. As I said in my opening remarks, as we have tested the success of diversification apart from the railway business if any which is coming from them, we expect that in the FY27 our sanctions should be more than 75,000 crores. Now how high it goes we will review every quarter but I’m sure that we are sure that we will be crossing that mark of 75,000 crores that we did in our very first year of diversification similarly on disbursement front, last year was a tight year for the fact that there was no pipeline.
Now that we have a pipeline and we are expecting good business from starting from Q1 we believe that the mark of 35,000 will be again breached. The important and interesting thing that I keep on telling every quarter is that for this company which was doing business only with single client Indian Railways where margins were fixed, those margins used to be 35 paisa for projects and 40 paisa for rolling stocks. When we are competing and doing business for the very, very attractive and good quality assets in government system also we are able to Garner a margin of more than 100 bps.
So what will happen that this 35,000 crore or that we are doing business it is akin to nearly a lakh crore that we used to do with Indian Railways. In terms of yield that is a sweet spot for IRFC. And going forward, as you see all of our financial parlays, everybody’s NIM is under pressure. While IRFC because of the fact that the NIM was base was very low, quarter after quarter will be showing bitterness. So that is the answer to the question Nilesh. I hope I clarified.
Unidentified Speaker
Got it sir. That was very helpful. Second question was on this incremental NIM. So you while you rightly pointed out that the NIMs are way higher in the new business, what we are doing xof the Earthwile railway specific business. Just wanted to understand over here today if we are giving X rate to the prospective or the potential borrower, typically what rates are we undercutting? What yield was being offered by someone else and what are we offering on the yields per se?
Manoj Kumar Dubey
You see in the market we have all kind of assets. There are risky assets where you can charge more. There are pristine assets as typically you say a class asset when the assets are rated, obviously when it is rated, when it is promoted by Maharatna with very strong balance sheet if an asset is a renewable asset. So every class of assets is attracting a different kind of competition. We are always looking for the best class assets because you know we are one of the rare companies not only in India but in the world.
For the size of the balance sheet of more than 5 lakh crores we are 0NPA company. And typically every forum I say that 0NPA is not a status symbol for this company. It is a business proposition. Why it is a business proposition? Because of zero NPA I am attracting cheaper borrowing from the market than my POS which helps me in offering better rates and for the fact that it attracts my investors also because everybody likes to have a company in their kitty who are having the best class assets. So we are not participating into high risk, high reward assets.
We are participating into assets which are highly rated A class A plus AAA also. So that is what I mentioned to you. Typically here the margins are in tune of 100 bis to 120bs, not more than that. And in this bracket we are competing. Well we are competing not only with nbfc, we are competing with all the banks also. So typically for these class of assets nowadays banks are also coming for as a long tenure or 10 years. So yes, it’s a crowded place. But the happy thing is that despite being the crowded place for the best class assets, IRFC is winning more than 60% of the bids.
So going forward our margins we are looking for the margin in tune of 120bps typically on an average.
Unidentified Speaker
Got it sir. And one last question from my side. So basically the assumption is very rightly mentioned that 100 to 150bps of differential margins are there. But in the other the erstwhile business of railways we got certain benefits of tax etc. Also. So not going into detail about how the roa tree would look like for the new business and the old business but adjusting for this tax benefits and the lower provisioning requirement etc. From the Indian Railways at RoA level say today at company level, what I can see from presentation we are at approximately 1.39% where I believe 35,000 is from the new business and the balance 4,30 crore, 450 crore would be from the erstwhile business.
But there’s a broad difference in the ROA profile of the new lending versus the earth file lending. Any differential. If you can help me on the roa that would be very helpful.
Manoj Kumar Dubey
So I’ll tell you the general thing. You rightly said so. So today say my total AUM is 4.85 lakh crore. And this the new business is typically 35,000 crore. The percentage comes out to be nearly 5%. What target we have given to ourselves in the last call also we’ve talked about this. This company feels that going forward our asset quality should be 60. So 60% should typically be from the Indian Railways which is costless model at 6 kind of margins and 40% we are looking forward to garnering from the diversified field.
So when you take two together you can put the numbers, I mean at 5% we stand at 1.39. This has come out from 1.34% going forward, as I said, you will be seeing consistent improvement in roa. Now where would it land? That is a calculation that you can do. It’s very simple to do. Based on our 5% of diversified portfolio. If you add 30% you can reach to a conclusion what is going to be the ROA going forward say in next two to three years.
Unidentified Speaker
Okay, okay. But any sense on what kind of roa? I understand because this mix would include a lot of calculation which on the tax benefit ones are getting and provision requirement are slightly lower
Manoj Kumar Dubey
On tax. You know we have enough depreciation kind of thing in our kitty so this company will remain tax free with the kind of already accumulated deficit that we have for next five to seven years. And rest be assured, company will be getting more and more leading business for rolling stocks in the future. Not only within Indian Railways, we are going to do it for Metros also for rapid rail also. So we are very comfortable that for quite a longer period. Right now it is quite quite visible that this company, for this company, PBT and PAT will be same and we will be getting the benefit of the tax that we are getting out of depreciation.
So there is no concern right now for next five to seven years on that account.
Unidentified Speaker
So if I just do the rough calculation where if names are 100bps higher. So the 2.25 to 2.5 is the NIM and typically operating costs are 0.25. So P pop runs to 2.25 provisioning. So assuming standard asset is 0.4 and under construction is one person. So again provision number of 0.5. So since no tax required for next 5, 4 years so ROA would be 2% for the new business. It is right to assume.
Manoj Kumar Dubey
I’m happy to hear from you. So this is how you will help me out. So your numbers I’m putting on the paper and I’ll be validating it and coming back to you in next quarter.
Mohit Jain
So this
Manoj Kumar Dubey
Is a benefit that, that that management gets by interaction with you guys in the conference call. Your numbers must be perfectly fine because you are good at it. So I’m not doubting your numbers. I think you are going doing the right calculations. But this is not coming from our side because it is your job to do the calculations. I can give you the indicators and you have taken all the indicators in the right manner that I can assure you.
Unidentified Speaker
Okay sir, got it. And once again thank you so much for patiently replying to all queries.
Manoj Kumar Dubey
Thanks Nilesh. Thank you.
Operator
Thank you. The next question is from the line of Mohit Jain from Tara Capital Partners. Please go ahead.
Mohit Jain
Hello. Hello, can you hear me sir?
Manoj Kumar Dubey
Yes, Mohit. Please go ahead.
Mohit Jain
Yeah, hi. Good morning sir. So a couple of things. First on this, the sanctions disbursement that we made to this fertilizer planter, I believe sir, our MOA is allowing us to disperse it to the railways and any other companies which are in the same ecosystem. So this was into fertilizer sector. How is
Manoj Kumar Dubey
It correlated to our core sector?
Mohit Jain
Just trying to understand this.
Manoj Kumar Dubey
Oh yes. So you must be knowing or if you’re not knowing then let me reiterate our Mandate says that anything having a backward or forward forward linkage with the railways we can find meaning. Thereby any entity which is bringing in business to Indian Railways we can fund. So you know typically this, this, this high production fertilizer companies, they’re all linked to the railways. There is always hiding there. And all evacuation of fertilizers are taking place through the railways. A B the raw material for that fertilizer comes like ammonium nitrogen.
These are also hauled by the railway itself. So they all are having railway sightings within their campus and all evacuation of the finished board and the raw material going to their factory through the railways. So they are coming under the ambit of backward and forward linkages with the railways. And that is how we are funded. And that is more the sweet spot for IRFP because the moment you talk about backward or forward linkages there is hardly anything left in infrastructure which is not having a backward or forward linkage with the railways.
Mohit Jain
Got it? Got it. So basically any entity which is using railways become sort of our target customer.
Manoj Kumar Dubey
Correct? Correct. Absolutely. And that is how we did funding to two of the mega fertilizers companies of the country. One which is already under production that you mentioned, Hurl which is promoted by our Maratna giants like NTPC and iocl
Mohit Jain
And
Manoj Kumar Dubey
The other one also we are funded in Talcia which is under construction that also is promoted by another Maratna giant like GALE and Coal India and RPA Chemical which is Navaratna. So yes, any evacuation of fertilizer will take place by the railways and any raw material going to them is also through the railway. So they are very valued customers and we are very happy to align with them and fund them at a very attractive rate.
Mohit Jain
The second thing is regarding that mix we are, we are targeting have a 6040 mix going forward in three four years where 60% is going to be, the 40% is not is going to be non railway which is at 5% right now. Sir, in that situation even if I’m presuming a 5% year growth, we will be needing almost like a lakh crore of disbursement every year. So that we have a mix of 60, 40 by let’s say 34 years. How do we look at this number? Is it possible to have such a high disbursement in the non railway sector?
Because. No,
Manoj Kumar Dubey
No, no, no. You, you are missing, you are missing a point. So every year there will be repayment of 20000 plus crore from the Railways. So we have to. When I’m saying that I’ll be maintaining my A or growing it. So yes, 40, 000 crore is the base that I’ve talked about. Let us see how it grows. So what company. Company aspires to have a kind of 30% to 40% mix from the. From the non railway business. And you see in the first year, morning soldier days. In the first year wherever we participated without the pipeline we were able to disburse 35,000 crores.
Now with the kind of rates that we are offering and because of our low borrowing cost, because of our 0NPS status as well as because of very low overhead cost, we are able to fund at a very attractive rate to high quality assets. So today I’m not required to market myself. The business is coming to me and we are encouraging good quality assets to go for RFP and we are participating to RFP and the sweet spot is that you. I’m giving you a typical example. There is already RFP in public domain. NTPC and UP government is coming out for as big a tender as 28 to 29,000 crores.
Now we are also participating. It will be a very cutthroat competition because it’s a very good effect. But potential for IRFC to grab nearly. To grab nearly 16,000 crore because that is our limit. We do not have an exposure to many entities because we earlier did only with the Indian Railways. So for the fact that our net worth is quite high, it is as high as 56,000 crores. So as per RBI guidelines we can pick up around 16,000 17,000 crore of asset in one go if it is a very good asset. And we feel like so these kind of businesses are on the plateau.
So going forward it’s not that we said that we’ll be 40% in three years time but yes, we are Scottish and since we did very good business in the very first year we feel that the kind of capex requirement is there in the government parlays all over the country going forward. Because you know nip, you must have heard about NASA infrastructure pipeline. So nearly 20 lakh crore is the projection more than that for every year to be consumed by the government entities and the private entities. So business is there in the plateau.
We feel that we will get a good share. And yes, going forward in three years or four years or five years obviously when we are doing more and more of diversified business then the ratio will be somewhere nearly 40 to 60. This is what we are trying to tell the market
Mohit Jain
Is 10,000 crores per year or 20,000 crores. Per year from the existing daily contract. No,
Manoj Kumar Dubey
No, no. It varies every year. But repayment going forward will be around 20,000 crores now. So in that case how should we look at the EM growth number? What should we expect as the UN growth for next couple of years? So we have given us a target that let us cross 5 lakh crore marks in market FY27 and maintain it steady. We are not putting any numbers on that. But one thing we are assuring that Once we cross 5 lakh crore mark you won’t find any dent in that. It will be growing. How much it will be growing, that is a different issue.
But the better thing is that will be replacing the lower margin business of Indian Railways with the higher margin business of diversification. So even Apple. To Apple, if I’m say replacing 30,000 crore from the old business and adding 30,000 crore from the new business, my NIM will be at least having two times more than what I used to get from the old business.
Unidentified Participant
So in,
Manoj Kumar Dubey
In that case, Even if my AUM remains steady somewhere more than 5 lakh crore and I’m replacing low margin business by high margin business, my NIM will be growing, my PAT will be growing, my EPS will be growing. That is a clear message that we want to give to our investors.
Mohit Jain
Got it sir. So what’s the NIM differential between the two business? Just so we can come, is it like 100 basis points between the new and the old one?
Manoj Kumar Dubey
Yes, yes, yes. So 1.4 used to be from the railways. But what we expect from the new business is nearly somewhere between 2.2 to 2.5 and average. As you see what we have already delivered, we have delivered from average minimum of 1.42 to 1.50 for this FY which is nearly 6% up. So next year we want to see better margins because we will be getting benefit of what we have added in last year and what we’ll add this year. So we are giving us a target. And my name for FY27 should grow minimum 10%.
Mohit Jain
The in the sense like from 1.5 we should be expected to write to like 1.65.
Manoj Kumar Dubey
1.6. 1.65. Yeah. End of the year. End of the year on my total assets.
Mohit Jain
And so any guidance you would like to give for the. For the.
Manoj Kumar Dubey
I know you have said 5 lakh crores for em, but that is only a 3%. That’s too
Mohit Jain
Conservative.
Manoj Kumar Dubey
I have given very tough guidance for you which is very tough on my team when I say that we Wish to grow our top line by double digit. We wish to grow our bottom line by double digit. We wish to grow our EPS by double digit. We wish to grow our NIM by double digit. I mean you take all four together you can see without growth in a one, all these things are not possible.
Mohit Jain
And so just to re clarify something for
Manoj Kumar Dubey
My team I want to add one thing for my team. I always keep the target very simple. So once you put this number that you should grow Every every indicator by 10 they know they have to do the calculation how much a one should grow.
Mohit Jain
And just one clarification on the previous participants question for the tax you are saying for next five, six years because of the accumulated depreciation we are having it will be a tax free entity even for the non reliable.
Manoj Kumar Dubey
Yes, yes. Till the time we are again getting lease financing. So if we get again the lead financing of the rolling assets accrual will start again. But as of now, whatever we have in the kitty that is sufficient for next five years.
Mohit Jain
Okay. Thank you sir.
Operator
Thank you. The next question is from the line of Sukrit D. Patil from I side. Please go in.
Randhir Sahay
Good. Good morning to the team. Beyond the numbers which I have given in very much detail, just want to understand your perspective on how IRFC is preparing to capture future opportunities in railway infrastructure financing through addressing challenges such as the rising capital requirements, interest rate volatility and regulatory oversight. What strategic levers do you see most important for sustaining growth and supporting the company in the coming quarters? That’s my first question. I’ll ask second question after this.
Thank you.
Manoj Kumar Dubey
So you are asking very complex question. But let my business development answer this question.
Unidentified Participant
As told. You must see our previous progress. In last one and a half year we have covered up a major milestone. And in last one year we have sanctioned more than 74,000 crore. And going forward also now earlier we didn’t have that the pipeline. But now as our leader has told that we are confident and we are getting good inquiries from the entire ecosystem. And going forward there would be a good capital investment in many of the sectors. Like there would be a good investment in the power sector. There are many capacities are coming up.
In the thermal sector there would be a good amount of investment in the railway sector as well. Because we are also hearing in the news that there would be a new corridor of that would require two and a half lakh crore. There would be a seven high speed rail corridors. They would require another 16 and a 16 lakh crore kind of an investment. There would be A good amount of investment in coming years in renewable sector in road sectors there would be a good investment investment in the port sector.
So we are confident that there is a good good amount of inquiries we are getting and we are very hopeful that we will surpass this target at the end of FY27. Having said that regarding the regulatory oversight because as of now my net worth stand at 56,000 crores and we we have just disbursed around 35,000 crore and pensions only 75,000 crores across various sectors, across various entities. My exposure norms is open so that that that gives me a good cushion that I may have a good exposure in coming years over the pristine asset.
So that that would give me a good comfort and pricing. We will be aligned with the market. Yes, there is a hardening in the interest rate in the market. But ecosystem is taking that fact and based on that we also revise our our lending rate based on the so that we will remain competitive and we should be getting the adequate margin to support our top line and bottom line.
Randhir Sahay
Thank you. Thank you. My final question again forward looking one. Looking ahead, how do you see IRFC funding strategy evolving to meet the growing needs of Railways? What measures are being taken to strengthen liquidity, diversify funding sources and align capital structure with long term expansion plan? Thank you.
Manoj Kumar Dubey
Yes, we remain the sole financing arm for Ministry of Railways and Indian Railways. Having said so, if there is any requirement of extra budgetary resources over and above what Indian Railway is getting from budgetary support, IRFC will be the first financing arm where they will come. Now we all know that the kind of expansion that Indian law is having CAPEX requirement that is now hovering around 2.6 lakh crore for them for last three years. This is going to continue for five to 10 years. So if there is any redistribution going forward from this FY or next FY in the budget for social sector and the pressure not to meet all the requirements of Indian Railways or Mr.
Railway through through GBS we will obviously be there. Second thing, as my EDBD mentioned to you, you know if you recall last time when dedicated state corridor Eastern and western took place, the funding came from bilaterals and multilaterals. One was funded by jica, the other was funded by World Bank. Similarly high speed rail corridor, the one that is already being commissioned, it is funded by jica. Now there are seven high speed rail corridor that has been announced. And there is one dedicated rail service in the railway ecosystem from Dankuni to Surat has been announced.
Total requirement is huge. IRFC prior to last FY had never ventured out to any of the customers even the siblings in the railway ecosystem. Now that we have already refinanced one of the World bank loans of dedicated rail corridor for more than 10,000 crore going forward, the requirement for greenfield lines in high speed as well as DFC is our first business. We will be having our first right on them now. How it will be modeled, it is to be seen, discussions are already on. But let’s be assured that in the huge funding requirement that these two things in the railway ecosystem is going to take place, majority of funding has to come through IRFC and we are gearing for that.
We are planning for that. The moment things will go on, you will be hearing how we are going to fund them. Second, yes, there are many SCVs are also coming first mile, last mile. Earlier we never used to fund them. We have now started funding them also because their business model is dependent upon railways and it is vetted by Ministry of Railways. So we have got good comfort and cushion to take care of them also getting together. As you rightly indicating to us, there is huge business opportunity in the railway ecosystem itself.
But we are not limiting ourselves to them. The allied business coming from as my EDBD mentioned that from the port Metro Railways you will be hearing very soon, maybe in the quarter one only that we are going in a very big way to take them also on our wings and we will be one of the biggest players, in fact the lone domestic player per se, apart from the multilaterals who will be arranging small funds for Metro Railways which is a very very big business entity in the country for the fact that almost every state is aspiring to have Metro Railways, we are already in talk with one of the states for their funding.
So overall, yes, in the total infrastructure scenario having Indian Railways or Railways policy at the center, there is huge business on the plateau and there is enough requirement for IRFC to ensure that liquidity remains there. We are having very good standing in overseas market also. In fact you may be aware that we did back to back to ECB loans of $300 million worth of yen. Then we did successfully for $400 million worth of yen. Already we have opened one bid of $1.1 billion worth of yen. So that speaks volumes about the appetite as well as the preference of the foreign bankers to lend to India because they believe in the story, that growth story that India is unfolding.
In fact we had a very extensive roadshows also. You may be aware if you’re following us a Big team from our side went to Japan, a team went to Singapore, a team went to Taiwan and Hong Kong. We have already sensitized all the foreign banks Typically more on Yen side that there is a huge requirement of consumption of ECB loans. Maybe Yen as a priority right now because right now dollar is not a very preferred currency. But going forward we’re looking for the bond market. Once the SOFA rate and things go a little sober, we’ll be looking for that also.
And ECB contribution we are looking forward to 30 to 35% total KT. We are focusing heavily on the infrastructure dependent long term capital gain bonds that government have launched 54 EC earlier we used to be very casual about that but now we are focusing on it. My market share has gone up to 28% last year. This year this will go up more. It is coming at a very cheap rate of 5.25%. We were the first company last year who successfully did zero coupon bond. It’s a bullet payment after 10 years and HNI showed confidence in IRHC and it was mopped us at a very attractive rate.
Going forward we will be mopping up that also. Yes, domestic bond rates right now is hardened. It is hardened for everybody. Not only for us but at the same time RTL still is available at cheaper rate having very moderate repo rate. So altogether last year also we strive to have our total borrowing cost less than desecrate and that is a target this year also. And that is where the sweet switch spot lies for irfc. And as I mentioned every time that zero NPA status is helping us in attracting good lenders to us and it is a business proposition and we believe that cherry picking the good quality of assets will remain so despite the fact that we are hovering out of Indian Railways and going to the whole of government approach.
But Euro NPA will remain there and we feel that we continue to garner best of the borrowing rates in domestic as well as ECU markets. I think that comprehensive answer gives you the confidence that even a Lacroix disbursement is required for MiResight consistently every year. We have done in the past and we are competent to do in the future also.
Randhir Sahay
Thank you and best wish it.
Manoj Kumar Dubey
Thank you.
Operator
Thank you. The next question is from the line of Naman Kumar, an individual investor. Please go ahead.
Unidentified Participant
Hello, Good afternoon sir. Quick question with regard to the results. So if you see the PAT from Q3 to Q4 because the IRC is in a business where AUM grows each quarter. So if you see last quarter December 25th the PAT was around 1800 crores while this quarter Q4 it’s 1684 crore. So a drop of around 100 crore. And plus if you see include the other comprehensive income it has declined from 1800 crore to 1500 crore of blocks. So in fact there is a reduction of 100 crore. And in OCI there is an impact of 200 crores.
So can you please explain that like what is causing that.
Manoj Kumar Dubey
So Naman, not much to worry. There are few issues which are which which were new to us for the fact that Palais we never had the chance to do provisions because for lending to Indian Railways it was all zero lifting. But as for IBM norms when we fund even to the CPSU or state government the provision lies it will made. Are there other issues? Let my account said answer your questions and your concerns. Yeah,
Unidentified Participant
If you just were total revenue portion there is a decline from in the other income also we got a refund of income tax and there was some interest portion in that in the last quarter. Q3 Whereas in this quarter there is a. There’s no such item actually. And on the other side you see there is. There are some other expenses like CSR expense. We have made some additional provision in the current quarter. And regarding the oci I mean this is whatever is there in the mark to market. We have all our borrowings in the foreign currency which are on our balance sheet.
Those all things are hedged actually and whatever movement in the market of the those currencies MPL that we need to make a provision for that through oci. So this is regarding the total comprehensive income.
Manoj Kumar Dubey
Okay, got it. And with. Yeah please, please tell. Please tell them. I’ll answer you again.
Unidentified Participant
Yeah, sure. And then with OCI I. I believe for the exposure to Indian Railways at least all the fair value on foreign currency borrowing or cost of hedging should be passed on to the Indian Railways. Absolutely.
Manoj Kumar Dubey
Yeah, you have right understanding.
Unidentified Participant
So then why is it coming in the financials? Is it. Will it be recovered in next quarter? Like will we see a reversal in next quarter or how will it go? Because currently it seems like it’s impacting the IRFC financial. No, no. This is whatever is there for the ministries that is part with the ministry’s account. Actually whatever is there in OCI it is only above portion. And there are some other items like for the staff benefit cost that would be coming. And then we have made an investment with the aircon.
So there is a movement of that investment also. So that is also coming in that OCI portion. Yeah. Majority of the portion is fair value change in foreign currency borrowing as per the Q4 results. So that’s where I’m trying to understand will it be passed to Indian Railways next quarter? Or maybe it is just because of exposure to non railways financing which we have done. In that case we won’t be passing. No, no no. This will be. We have two kind of exposure. One, one we do for the MOR business and other whatever lending we have done through for other than the conventional non Mr.
Business. That risk is in my balance sheet and for that we have taken the fuel hatch and these are the MTM valuation for that. And based on the India’s 109 we have accounted this on the basis of cash flow as and whenever these, these, these exchange will flow to me on actual basis. Accordingly these will get reversed. So the other, this is a temporary parking. Ultimately it will get reversed and will be reclassified through the pnl. These are the temporary item for the exposure which I have on my own balance sheet.
This, this will not be passed on to the moi. Okay, got it. Yeah, yeah this was helpful. Just one additional clarification with regard to exposure to non Railways, non Ministry of Railways, exposure to like a CPST and all those things. So if we have some foreign currency borrowing pertaining to loans given to them. So in that case what happens with the currency risk? Is it born by US IRFC or is there a agreement with them that we pass on that cost as well to the cpsd?
Manoj Kumar Dubey
So Naman, typically for any non railway business we are quoting a rate. And if you are putting ECB mixed into a risk lies with us. And as my EDBD told you, what we are doing as a very responsible and safe company that we are hedging it right away. Right. And my hedging limits are quite conservative in terms of yen as well as in terms of dollars. So whatever we have raised right now on the balance for our P and L purpose we have already hedged it with a very secure kind of ranges number one. Number two, we are also creating a kind of cost plus model for Metro Railways.
You will be hearing it very soon where risk will be passed on to them. So typically now Indian Relief Finance Corporation two models, one you can have a cost plus model also we are ready to do that because we have been doing that for long for Indian Railways. Other model is when we are participating in their open bid where they want somebody to code with all the risk together we are doing that also. So going forward we will have two kind of things. But yes, what we have decided right now that whatever ECB we are raising for non railway assets where risk is lying on us we should be immediately health fully for it.
For your information, good thing is that what we raise ECB for for non railway conjunction, the hedging overall hedging cost taken together the rates are coming somewhere below 6% which is very attractive for us.
Unidentified Participant
Okay, got it. This was really helpful. And my second question is with respect to the exposure which we have, which we are now having other than Ministry of Railways. Right. So we may have some exposure to state government also. So what kind of safeguard we are having in place so that we continue to be zero NPA company in future? Because you know like there can be a risk risk of default With Ministry of Railways there is no risk of default for others there may be. So what kind of safeguards or guardrails.
Manoj Kumar Dubey
Yes, you are very right and the guardrails and the. And the kind of security that we are looking forward is first in the CPSS we are all clients. I can name you and you can get the feeling who are the clients. Our clients are NTPC on their facilities subsidiaries. Our client is Gale. Our client is Coal India Limited or its subsidiary. Our client is IOCL or audit subsidiary. So meaning thereby in the OR we have done DFCCL which is a sibling Then we have lended to an SVB which is promoted by my siblings like Concord and rvnl.
So all these names, if you are following them you will be very well aware that they all are having very strong balance sheet consistently profit making giants in the CPSE partners. So it is a cherry pick among the CPS also Similarly when you are going to state governments mainly into the power value chain so we are completely avoiding any kind of business with discounts that is not our business because we are not having any kind of of experience on exposure in them. There are other siblings in the NDC palace who have got the experience exposure and they will keep on doing it.
We are limiting ourselves to Genco and Transcode. Amongst that also we are cherry picking those assets which are having very strong balance sheet having cost plus model PPA arrangement in place. Given your flavor we have not gone to any of the states which are high consuming states in Southern part with due regard to them we have our right to choose the kind of states where we wish to do the business. We have done the business in Mahaj and Co. They are the number one state government in terms of having the assets and they are doing very well.
Their balance sheet is good, their rating is good. Similarly we have done two Chhattisgarh we have done to Haryana. We are planning to do one where there is a 5050 JD with NTPC and UP government. So I can you can see the kind of cherry picking of quality in the space we are doing. Yes, I mean there is a balance sheet and there and there is a risk but then we have to see to it that what kind of assets we are picking up. These assets are having backing of state governments with a very strong way they are tied up.
Things are there nowadays in the value chain the payment of gencos and Transcode are almost assured and that is why we are typically not going touching anything in discovery because they are the chemistry is all different. So answer to your question is we are taking all due care to ensure that even in the government parlay we have whatever assets we are cherry picking is as safe as it could be. And as I always said you must have heard in the beginning also zero NPA for IRFC is not in status. It is a business proposition.
If I remain 0 NPA I will be garnering lower cost of borrowing that were that we are doing in domestic and international market. So rest we have showed that the management and the appraisal team is taking full care of it.
Unidentified Participant
Yeah. Okay. This is very helpful. Thank you. That’s all from my side.
Manoj Kumar Dubey
Thank you.
Operator
Thank you. As there are no further questions from the participants I now hand the conference over to the management for closing comments.
Manoj Kumar Dubey
Thank you Manish. We are very happy to close on a happy note in terms of numbers as you know listed company has got a very onerous staff to come back every quarter get its report card with everybody. So it’s already mid of May Q1 half of the Q1 has already gone. So you know very soon we’ll be meeting again our investors and the good thing is that we have already embarked on the new journey of diversification which is really giving us confidence now having done well in the last FY and we believe that going forward every quarter in FY27 we’ll be coming out with very good numbers as the state expects us to do.
Let us see that the good work that is being done by Team IRFC continues to enthrall and satisfy the investors who are very dear to us. Thank you.
Manish Agarwalla
Thank you sir and all the best.
Operator
On behalf of Philip Capital India Private Limited that concludes the conference. Thank you for joining us and you may now disconnect your lines.