IRFC secures $300 million loan from Japan’s Sumitomo Mitsui Banking Corporation
Indian Railway Finance Corporation (IRFC) has signed a loan agreement with Sumitomo Mitsui Banking Corporation (SMBC), marking its return to the External Commercial Borrowing (ECB) market after a gap of over three years.
According to an exchange filing, the agreement for a US$300 million loan in Japanese Yen (JPY) was signed on December 2, 2025, at GIFT City in Gandhinagar, Gujarat. The company stated that this financial maneuver was designed to support various infrastructure projects, especially related to the railway sector.
Credit structure and use of proceeds
The ECB facility, which has a five-year maturity, is evaluated according to the Tokyo Overnight Average Interest Rate (TONAR). Revenues from this facility are allocated to projects closely related to the railway sector or other initiatives approved under ECB guidelines. The application detailed that the loan was structured as an unsecured facility, and the company noted that this underlined the confidence of international lenders.
The official statement also clarified that the agreement does not require any special rights such as changes in capital structure or appointment of directors, thus preserving IRFC’s operational independence. It also noted that there was no shareholding or related party transaction, emphasizing the arm’s length nature of the transaction.
Corporate strategy and governance
Manoj Kumar Dubey, Chairman and Managing Director and CEO of IRFC, emphasized the company’s commitment to competitive resource mobilization.
Dubey said, “At IRFC, our priority is to mobilize resources through various available routes at the most competitive rates, thereby supporting projects that are closely integrated with Indian Railways and provide lasting benefits. By tapping the External Commercial Borrowing market after over 3 years, we are not only reducing our weighted average cost of borrowing but also aim to revitalize our presence in the international market, which will play a significant role in further strengthening the railway infrastructure vital for nation building.”
The company stated that this move aims to reduce the weighted average borrowing cost and revitalize its presence in the international financial market, which it considers important for strengthening the railway infrastructure.
This agreement with Sumitomo Mitsui Banking Corporation is positioned as a testament to IRFC’s strategic focus on leveraging international collaborations to enhance its financial portfolio and project financing capabilities.
Disclaimer: This article was created using AI tools and has been editorially reviewed for clarity and consistency.
