IRFC steps up external borrowing to cut costs and broaden funding sources

Indian Railway Finance Corporation (IRFC) has stepped back into the external commercial borrowings (ECB) market after more than three years, raising the yen equivalent of $300 million from Sumitomo Mitsui Banking Corporation . Chairman and Managing Director Manoj Kumar Dubey said this marks the beginning of a broader strategy to diversify funding and improve profitability.

Dubey explained the rationale behind choosing yen borrowing at a time when interest rates in Japan may rise. “Once the rates go high in that side, the hedging cost comes down,” he said, calling the structure a “very good opportunity” for diversifying the lender’s funding base. The borrowing, with a five to ten-year tenure, is expected to have an all-in cost of 6% to 6.2%, which he views as commercially attractive com