Indian Railway Finance Corporation (IRFC) has signed a loan agreement with a consortium comprising Sumitomo Mitsui Banking Corporation (SMBC) GIFT City Branch and MUFG Bank Ltd GIFT Branch to raise an External Commercial Borrowing (ECB) of JPY equivalent to $400 million.
The agreement was signed in New Delhi by IRFC General Manager (Finance) Nav Goel and SMBC Executive Director Manoj Kaushik, along with MUFG Head IBU Parul Shah.
This marks the second ECB transaction by IRFC in the current financial year, following the successful raising of JPY equivalent to $300 million in December 2025. With the latest transaction, the company continues to diversify its funding base through overseas borrowings.
The five-year loan is benchmarked to the Overnight TONAR (Tokyo Overnight Average Rate), aligning the borrowing cost with Japanese yen interest rate trends. The proceeds will be deployed towards financing projects with forward or backward linkages to the railway sector, or any other projects approved by the company in line with prevailing ECB guidelines.
IRFC Chairman and Managing Director & CEO Manoj Kumar Dubey said the fundraising reflects the company’s strategy of tapping diversified funding sources at competitive rates.
“At IRFC, our continuous endeavour is to mobilise resources through diversified avenues at the most competitive rates, enabling sustained support to projects closely aligned with Indian Railways and delivering long-term value to the nation,” Dubey said.
He added that following the company’s re-entry into the ECB market in December 2025, the latest $400 million equivalent borrowing reinforces investor confidence in IRFC’s financial strength and long-term strategic direction.
According to Dubey, the transaction will help optimise the company’s weighted average borrowing cost, deepen engagement with global capital markets and enhance its ability to support the ongoing expansion and modernisation of railway infrastructure.
IRFC, the dedicated financing arm of Indian Railways, plays a critical role in funding rolling stock acquisition and infrastructure development. By leveraging overseas markets such as Japan through yen-denominated borrowings, the company aims to secure cost-effective, long-tenor funding while maintaining a balanced debt profile.
The latest ECB underscores IRFC’s continued access to international liquidity pools and its efforts to align funding strategies with India’s long-term railway infrastructure growth plans.