Mumbai: The Indian Railway Finance Corporation (IRFC) has raised Rs1,200 crore from the market. While Rs700 crore have been raised in the form of bank loans, Rs500 crore have been raised through bonds. IRFC is the fund raising arm of the Indian Railways.

While Rs700 crore has been raised from five nationalised banks for a five-year tenor at the rate of 7 per cent, Rs500 crore has been raised through the issuance of bonds with a weighted average cost of 6.18 per cent.

The bonds have been issued to UTI, Citibank, Stanchart, Bank of America, ICICI-Securities and DSP Merrill Lynch.

As for the Rs700-crore loan, IRFC has raised the amount from the United Bank of India, the Syndicate Bank, the Allahabad Bank, the Dena Bank and the State Bank of Hyderabad.

The entire amount will be used to fund the rolling stock acquisition of the Indian Railways. IRFC is expected to raise Rs3,400 crore for buying assets for the Indian Railways this fiscal.

In fiscal 2004-05, IRFC borrowed a total of Rs2,888 crore out of which offshore borrowings were Rs1,096 crore and domestic borrowings were Rs1,792 crore.

The total borrowings were at a weighted average cost of 6.12 per cent after providing for the foreign exchange risk and a weighted average tenure of over seven years.