Indian Railway Finance Corp Ltd
NSE:IRFC
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Indian Railway Finance Corp Ltd
Earnings Call Analysis
Q2-2025 Analysis
Indian Railway Finance Corp Ltd
The Indian Railway Finance Corporation (IRFC) has established itself as a pivotal player in financing railway infrastructure in India. Over the past five years, IRFC has achieved phenomenal asset growth, with average disbursements reaching INR 60,000 crores annually. Notably, FY 2021 saw disbursements exceeding INR 1 lakh crores. This growth trajectory enabled the company to expand its assets under management to INR 5 lakh crores, positioning it as the largest non-banking finance company in this segment. The IRFC has maintained a commendable record of zero non-performing assets (NPA), showcasing robust risk management and a stable revenue stream, particularly from railway projects.
On October 10, 2023, Manoj Kumar Dubey assumed the role of Chairman and Managing Director. With over 30 years of experience in railway logistics and finance, Mr. Dubey's leadership is expected to influence the organization positively. One of the primary focuses under his leadership will be to diversify funding sources beyond railway projects. The company plans to explore opportunities in sectors that connect with railway logistics, thereby expanding its lending portfolio.
IRFC is actively looking to broaden its lending options, moving beyond its traditional railway focus. Recently, the company initiated a funding agreement with NTPC, valued at INR 700 crores, for rolling stock, illustrating its strategic shift. This diversification is not an isolated endeavor; Mr. Dubey indicated intentions to pursue projects related to logistics, energy, and others involved in India’s infrastructure development. Importantly, IRFC is positioned to maintain its low-cost structure, giving it a competitive edge over peers with anticipated margins higher than the current 35-40 basis points in railway lending.
Despite a temporary pause in new disbursements over the past six quarters, IRFC is proactively reassessing its debt-equity structure to enhance growth potential. The debt-equity ratio has been pulled back to approximately 7.5, improving from over 9 previously. Future plans include targeting a compound annual growth rate (CAGR) of around 20-25% for asset growth in the next several years, although specific financial targets are yet to be disclosed. As disbursements are expected to resume as government policies clarify in early 2024, investors are advised to monitor these developments closely.
The current interest rate environment impacts the costs associated with financing. IRFC's weighted average cost of capital remains competitive, which aids in maintaining attractive lending rates. The discussions during the earnings call reflected optimism about capturing market share from other non-banking financial companies (NBFCs) operating in infrastructure funding. IRFC's strategy focuses on leveraging its extensive networks and experience in low-cost borrowing, which is crucial as it ventures into funding other infrastructure sectors.
IRFC operates within a supportive regulatory framework established by the Government of India, primarily focusing on railway financing. The upcoming federal budget in January 2024 is expected to provide further guidance and funding clarity. Moreover, with historical precedence establishing reliable disbursement timelines, IRFC's unique position as a government-backed agency bodes well for future investments driven by national infrastructure priorities.
For potential investors, the evolving landscape at IRFC offers a blend of stability from historical railway financing and growth potential from diversification strategies. The promise of continued government backing alongside a strategic pivot to infrastructure lending and a focus on quality assets suggests an attractive investment opportunity. Stakeholders should remain vigilant for upcoming announcements regarding financial forecasts and budget decisions from the government, which will play crucial roles in shaping IRFC's performance in the years ahead.
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Ladies and gentlemen, good day, and welcome to IRFC Q2 FY '25 Earnings Conference Call hosted by DAM Capital Advisors Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sanket Chheda from DAM Capital Advisors Limited. Thank you, and over to you, sir.
Yes. Thanks, Ridhi. Hello, and very good morning to all of you. We are here to discuss the IRFC Q2 results. We had as the entire management team, the key personnels will be Mr. Manoj Kumar Dubey, who is the Chairman and MD, he would be doing the call for the first time after joining IRFC and quite a dynamic personality comes from where we check [indiscernible] across many industries. The second is Sheri Varma, who is Director of Finance; and Mr. Sunil Kumar Goel, who is DM Finance and CFO.
So without further that, I'll hand the call over to the MD sir, Mr. Manoj Kumar Dubey. We'll follow that up by question and answers after his opening remarks. So over to you, sir.
Thank you, Sanket, for all good words. Good morning, friends. Welcome to conference call for quarter 2 results of FY '25 for IRFC. I'm Manoj Dubey, Chairman and Managing Director of this company. And with me is my Director of Finance, Mr. Sheri Varma; and my CFO, Mr. Sunil Goel, and also my Head of Department.
Before we discuss the H1 and Q2 results of the current FY, let me have the opportunity to introduce myself in brief. I took over at CMD RSC on 10th of October last month. I bring in more than 30 years of experience of working in railway intra logistics and railway finance ecosystem. I'm an IRS officer of 1994 batch from civil services. And I worked with UTI also before joining railways. In the last decade, from 2013 to 2018, I headed the railway board infra finance wing of PTC and extra budgetary resource mobilizes. So in a way, even you can say that for me now, I change the sides of the table. For the earlier days, I was looking at RSV for getting the money for railways. And now from here, I'll be doing the job from the other side. Meanwhile, from 2018 to 2014 -- 2024, I was also on the Board of Container Corporate India Limited, that is popularly called Concord, a leading Navratna railway logistics company as DFO -- DF and CFO. Ministry of Railways and GOY has been promoters of IRFC have brought me here at CMD for a tenure of 5 years.
Coming to a brief about the latest journey of IRFC. As you know, this company is working from 1986 mopping up fund for new railways, particularly. But the journey from 2050 onwards took a new turn. In 2015, for the first time, apart from funding the [indiscernible] requirement, that is engines and wagons and coaches for Indian railways. India railways also started taking a fund from IRFC for their project financing. I was, in fact, in those days in the railway board itself. That journey culminated in a very steep rise in the asset of this company, in fact, from 2018 to 2023 average INR 60,000 crores plus disbursement took place. And in fact, with 2 highlights. One, in the FY 2021, the disbursement by IRFC to Indian Railways crossed more than INR 1 lakh crores. And until that year, that was the highest for any NDFC to disburse in 1 year. Second, in the FY 2023, the total AUM size of IRFC grew more than INR 5 trillion, in our terms INR 5 lakh crore. In that particular year, it was highest in the CPFC and NDFC system. With this, steep riding the business has one more milestone took place in the company, in 2021, listing of this company was done, nearly 13% sales were divested. You all know that since then, the market cap of this company has grown steep, using a lot of confidence in the kind of business that we do. Company also has a rare distinction of maintaining go NPA all through and has grown stronger in the balance sheet in the last 5, 6 years. With very high and steep growth in its assets under management for 5 consecutive FYs, there was no disbursement in last FY and current profile till now. In fact, our debt equity ratio because of the steep price in the last FY has grown very high, nearly [ 9 ] plus, which is now pulling down to nearly [ 7.5 ]. This period of 6 quarters, in fact, when we did not disburse but our projects which we have financed with 5-year moratorium time while still giving us a good revenue stream -- and that is keeping our top and bottom line steady in health. With the full regular functional board in place now taken over for the next 5 years, and we have now my full team with me company is making concrete plans and road maps for renewed lending structure, not limiting itself to railway directly, but also for the backwards-and-forward linkages in railways and logistic ecosystem, which covers almost everything in infra sector. If you talk about port also on anything which is doing something that the logistics will come out in our purview of memorandum article. Meanwhile, going further, company will keep augmenting its core competence and be ready to leverage our balance sheet strength to make very attractive funding available to all sectors as per our mandate and [indiscernible].
You will be aware that IRFC's weighted average cost of capital has always been lowest among the peers. And we intend to further bring it down, leveraging our strong balance sheet, having more share of [ 54 ] EC and a 0 NPA 0 tax rate.
Coming to our quarter 2 results and numbers. As you have already seen, it has been as ready as it could be. And I show you that coming a couple of quarters will be giving a lot of pace to growth and growth trajectory of the company with interest of the country for the next 20 years, I would say, is completely intact. And the story of infrastructure in railway in particular, fully intact. I see a very bright future of IRFC.
With this, welcome remarks, I welcome you all to this Q&A session with us.
[Operator Instructions] The first question is from the line of Sanket Chheda from DAM Capital Advisors Limited.
Yes. So my question was that in the last 2 years, we have seen developments in other [indiscernible] and NBFCs as well. So PSR, feel like earlier used to do only power later, they have been mandated to do inside with this non-power as well as we see around CapEx after many years and the signs of private CapEx being up is already visible. So in case of IRFC, so far, we have been only into railways relating to -- related financing. Any thoughts on moving to different sectors or getting those mandates? And any change of strategy there or any inclusion of other sectors as a part of strategy? So anything that you can highlight would be useful.
So yes, Sanket, this is the most pertinent question for us. So number one, as you rightly said that the CFC and RFC from their core sector of power, they are now into everything as intra finance company. So likewise, we also have mandate from RBI to linked to anybody. There is no restrictions from that side. Having said that, till now, we have been funding only to the railways for 2 reasons. One, as you see that my asset under management size is as big as RFC and CFC with the appetite that railways had with us. So obviously, until now, we never look forward to anything else rather than meeting the targets of the railways which used to be very high. In fact, I mentioned that in the last 5 [indiscernible] before FY '23, the average disbursement was INR 60,000 crores, which was more than impact to IRFC also. Yes, going forward now, the first thing that we have already started looking towards the other entities who are having forward and backhole linkages with the railways and the logistics sector. In fact, if you are tracking us, we have already done a funding to -- we are entering into an arrangement to fund the NTPC for purchase of their wages with the use in the railway system for their coal logistics. Similarly, there is everything including even the hotel construction, which will lead with the railway tourism, which we can fund.
Also, yes, we are making a strategy, and we are very much planned to go forward in next quarter and the next FY -- next FY ahead to look into these prospects. And one more thing. As you know that in railways, we do the bulk of lending with a margin of 35 bps and 40 bps. Once we go outside for you, we don't have the restriction. So obviously, we'll be doing the lending at a very attractive way. In fact, better than and competitive on the peers, this is what our motto will be. But still, our margins will be high, and that will show a good growth in my pack also going forward. And the next combination that you mentioned, yes, going forward. The quarter-to-quarter will unfold with you and share with you, yes, our aim is also to be as good as funding anything and everything in the infrastructure of the country, like [indiscernible]. In the coming years, I will say, it's not visible in the next 2 quarters because the business line in the ecosystem backward forward or railway itself is the [indiscernible] right now. But with the growing muscles and things going forward, yes, that is the definition for this company also.
And sir, as far as the pricing is concerned, we see that RET, PFC cost of funds are around 7, 7.2, are these -- and they landed around [ 9.5 ]. So they make about 2.3, 2.5. We have been operating at a very thin spread. If we continue to do so for the other's infra, is there a possibility to gain the market share from the other NBFC's drilling in infra segment or any thoughts there?
So Sanket, your question has got to answer. The moment we I would say railway. In railway, it is 0 NPA business. It is a sold business. And we have an arrangement of funding them at 46 and 35 bps per project. Once we go and, obviously, the lucrative market as you rightly mentioned the kind of disc I'm not saying you are saying me that the 300 bps or 250 bps. So those lucrative aspects are there for us also to grab. Yes, as on [indiscernible] been, since we -- our weighted cost of capital has been lowest in the market, or as and when and which we are going to be very soon -- it's not that we are going to crack the market of lending. But yes, we will surely with the most attractive lenders in the ecosystem that is going without saying. And for purity, we are going to move out to the railways -- apart from the railways funding to the other sectors from next quarter onwards. So that is on the cards.
Okay. Okay. And sir, the other question was that one is that what kind of a growth CAGR we should expect over next 2 years, 3 years, 5 years that you would have under the plan? And particularly outside the railway related financing, which has been a 0 NPA business for us, whatever other things that we do how do you see the share of debt fees moving into 3 years or 5 years? So will it be say 10% of the AUM in the year, 15%, 20%? How do you see that?
So Sanket, I won't be putting in numbers on that. But as you see, what we are watching straightaway, a steady pipeline could come from the railways, that we are already discussing. And once the things unfold. As you know, railways declared this right in the beginning of the FY. And the due to the railways the old disbursement takes it in the same FY. In comparison to other companies where sanctioned projects are not mandatory disbursed in the same year. It may get disbursed in a couple of years, 3 years. In our case, once the railway declares in the budget back is much of intent, it is disbursed in the same year. So that is one stream. Second stream, we are not putting any numbers, but as you see, once we grow and go out in the market and start taking anything in the logistics field and the infras fields, obviously, we are going to grow in my numbers as always 0. My CAGR for those still will high, a. B, whatever margin will come from that business, as you have already seen that my peers are doing at 250 bps and 300 bps also in some cases. We look at the quality of the assets. And obviously, our goal really quite phenomenal. If you want to let me know in the next 2 to 3 years, that is the plan in the hand. I will refrain from putting numbers on that. But every quarter when we meet you, the numbers we keep unfolding for you.
The next question is from the line of Kamal Moolchandani from Investec Capital Services.
I just wanted to ask like what is the disbursement target, which we are planning for the current year and the next year? Apologies if I might have missed the answer to this question like earlier.
So right now, we are not giving any targets. As I mentioned to you, for the last 6 quarters, I mean, last full FY and this for the first 2 quarters, there has been no new disbursement. Of course, because of the moratorium that we have given on the project side, we are adding them every year in tune of around INR 25,000 crores, that will keep coming. Apart of that, after I have taken over last month, we are working very actively with MOR and MOF also with the finance also to find our CD business on the railway side. And we have already funded to NTPC, and we intend to start looking at the prospects in other sectors also. So I will not give you numbers. But going forward, I can assure that our disbursement as well as the project sanction will pick up steadily.
So just wanted to like understand that we are falling into other infrastructure sectors apart from railways. So what is -- is there some guidelines from the ministry or something that they won't be needing any funding from IRFC going forward?
Let's be very clear. Let's be very clear. As I mentioned to you, the funding to the MOR, which is our mainstay and which is the main mandate, that would keep continuing. What size of the funding will be there that they announce every time in the budget, okay? So the cost relate the budget would come out, we will deliver full clarity for next FY, a. B, for the FY also, and if you understand the government working system, there is something called revised estimate. And this revised estimate comes in the month of January, right, for this current FY. There may be a chance that if the field is giving us something that can come. There's no guarantee of that, but if something comes. The sale will be disbursed in Q4 only. This is the beauty of the business that we get from the railway. It's not like the sanctioning and divert will take in 3, 4, 5 quarters. Whatever if at all something comes from the DOE and MOR for us, to be disbursed that surely will be disbursed in this FY only. So it all depends how it unfolds. And I think the -- the story will be unfolding in January and February so far as government business is concerned. I hope I made it clear.
Okay. So I just wanted to ask like what is the contract size of the deal, which we have done with NTPC?
That is INR 700 crores. This is just the beginning because this is the first time they have won a leading model because, as you know, we don't do the funding in that loan kind of thing. It is the same model that we do for the railways. It will be a leasing model for 15 years. And the fourth tranche of 30 rigs they have entered with us. And this is a lucrative business, we are looking forward to coming from NTPC and all petroleum companies who are main customers of Indian Railways. So they are now thinking of owning the rolling stock on their own rather than depending upon the railway. So this is a very lucrative business going forward if you get a good pilot because we are the only company who are in the leading business of the rigs. And finance will obviously be better than one we are -- I mean, getting from the railway. So that's one of the rightsize that we are looking forward to, and we'll try to monetize it and grab it as quickly as possible.
Okay. So will there be any change in the tax rate because of this? Or like it will continue to be 0?
So let's hear from my Director Finance on this.
See, currently, we have opted for, as you know, -- and because of this depreciation on the leased assets, we are not paying any tax. So this -- this NTPC business is also on the leasing model. So we'll continue to get depreciation and because of the accumulated depreciation for my funding to MR also, for the next couple of years, we don't see any tax payments.
Okay. And like -- but will account for some credit costs for this, to some extent, like that would be there?
Whatever is a borrowing that will be called, but because of icily depreciation and further depreciation on that finance -- whatever finance we do subsequently, we'll get definition on that also. So we don't see any tax payments coming for the next couple of years.
Minimum.
Yes.
Okay. Just wanted to confirm on that point as well that since this is some financing to other than railways, will you be booking a provision for credit costs that will account for, right? Provision for -- towards the NPA or something like that.
Can you please what kind of a provision you are talking about? That was standard...
Again, loan losses. Again loan -- yes, correct.
We are currently doing 0.4% for whatever funding we have done for IRFC, the same provisioning we'll do for this -- this exposure also.
So that doesn't have much of impact as you see in the mine, we have done. So it is forward backwards. So it is coming by again and again.
The next question is from the line of Naman Kumar.
Am I audible?
Yes, yes.
First question is with regard to project assets. I understand 5-year in moratorium period. But after that, once it's the lease side, how much is the primary -- or like what is the duration of primary lease period? Is it same as rolling sort which is 15 years? Or is it more than that?
Let us hear from my CFO.
we will follow the same method as we are following in the case of a rolling sort. The primary lease period will be 15 years. And in case of project asset, secondary lease period will get reduced from 15 to 10.
So the 30 years remain the same. 30 years remains the same. A 5-year moratorium takes out of the second line of 15 years. So 15 year remains the same and the next 15 years reduce to 10 years.
Okay. Okay. Got it. And my second question is with respect to no targets being given to IRFC, I know we have discussed a bit on this with prior questions as well. But if you can give some clarity like why is the case because historically have all through previous year's annual report, like 10, 15, 20 years. I have never seen that Ministry of Railways has not given any target to IRFC. So there must be something which is happening to which might be you guys being a bit prevailed to. So if you can let us know, that will be very helpful for the investors to understand what is going on because I read on CAG report wherein there is a question or there is an issue of -- because Ministry of Railways is seeing substantial chunk of its collection to IRFC in the form of principal payment and interest payments on leases. So if you guys have any crazy to what is the rationale for the last 6 quarters or for the last 2 years and Ministry of Railways has not given any funding to IRFC, that will be very helpful.
So Naman, most of the things are in public domain only. So nothing which is being hidden from any of the shareholders of the company. So let's see it in a proper manner. So as you -- as I mentioned in my opening remarks also, if you look at the disbursement from FY '28 to FY '23, that was steep and abnormally high disbursement at ILC did to the railways. The average was INR 60,000 crores. If you listen to my opening remarks, FY '21 was as high as INR 1 lakh crore plus in 1 year. So there is something called debt equity ratio of that we also maintain for every company. And in those days, my net worth was nearly INR 40,000 crores or INR 39,000 crores. So this debt to equity ratio went more than nearly 10%, which is quite high in terms of [indiscernible] guidance also. So there were 2 things. One that all of a sudden in 5 years, if you look at if you are watching my balance about 30 years, you look at my assets in last 25 years and assets in last 5 years, that will give you the real picture. So the rise and -- rise of the balance sheet and assets under management was so high in 5 years, that is a little difficult to -- not to take a pause and put the things in the right [indiscernible], let the debt equity ratio also pulled down and our new strategy. So this is primary reason of that. Now where it is opined by Government of India that has fought no disbursement will be done by IRFC. This is the prime reason that we foresee as a company on behalf of the Government of India. Now there was some element vacancy is also in IRFC. Now that I have been put in the players and now a full board with me, we are already in constant discussion with MOR as well as MOF. And since nothing has come in clarity, so I'm not putting a number, but as I mentioned in the last question that something would come out with clarity in the month of January for RE that is this FY and in the month of February or next FY because government is very clear if there's anything allocated to IRFC that comes in the part of budget zone. So there is no ambiguity so far so far as that is conformed. So this is part A. Part b, after listing and with the size of balance sheet, which is nearly INR 5 lakh crores, it is incumbent about this company now to diversify. There is no requirement now just to be on -- dependent upon the funding on. The balance sheet strength and my network strength gives me a lot of legroom to start looking at the quality assets in all the infrastructure. As you know, national infrastructure pipeline, forecast, huge capital investment coming in various sectors of the country for the next decade. We want to be part of that, and we need to enjoy that pie also in a manner that we also get good numbers on our bottom line for our shareholders.
At the same time, we position ourselves as an NBFC, who is lending to all the people who are in the growth story at a very competitive rate. We have excellent reputation in the EV market. We are the ones in the country who gets the ECB lending at the cheapest rate. We are the only company who has come out with a 30-year tenor bond in the market. We are the first company who got their bonds listed in [indiscernible]. So these strengths, we want to leverage not only for railway going forward for all the sectors. And if you had other questions, beauty for me is that, if I do a railway business, I'm getting 40 bps. And if I do business outside the railways, as somebody mentioned -- Naman mentioned or somebody mentioned that the [indiscernible] 300 bps. So if I do the business even in smaller numbers than what I'm doing for the railways, my past is going to be very, very sound and steep. So next 2, 3 years, that road map and plans we are making and everything will be unfolding, as I said, every quarter onwards, maybe January when we're meeting with Q3 [indiscernible]. Maybe I'll be coming out with numbers also what MOR is giving us and what MOF is planning to give it to. But right now, this is a projection I can share with you. I hope I clarified.
Yes. Okay. So this was really, really helpful. If I can squeeze in one more question. It's more fundamental question regarding the interest cost. So -- so suppose when we lease our rolling stock, just a conceptual question, it is, suppose we leave a rolling stock of INR 100 crores. At that time, that particular year incremental borrowing rate for the year was 7%. So I'll leave it to MOR for 7.4%, right?
Let [indiscernible] give answer.
You're right. This is the WACC plus. But at the same time, we have to understand our business model. It's not only that our risks are also passed on. If there is any -- if that borrowing have done say, from a floating rate, the interest rate variation is passed on if that boring has gone from ECB, then currency valuation is passed on. So it's a cost-plus model, so cost plus some of the risks are also pulse. But you're right, if it all to the 7.4%. At 7.4%, I'll be calculating my leasing [indiscernible].
You understand the philosophy and for all shareholders. the philosophy of my lower bps margin with the railways. I'm 100% insulated with any kind of market fluctuation.
Yes, I understand. My question is more from support that lead 7.4% is it for 15 years. Now that INR 100 crores borrowing which I did, I may have done that not for 15 period some borrowings maybe for 10 years, some borrowings maybe for 5 years and some borrowings maybe for 15 years. So what happens after 5 years, INR 20 crores were borrowed for 7%. But after 5 years, the -- I have to reborrow because that matured -- that borrowing had to pay. So INR 20 crore, I now borrow at 6%. So that 1% extra benefit, which is arising accruing, does that also get passed to the Ministry of Railways or does that belong to IRFC?
So if it is done from the fee rates, supposing it's done from -- I fund it from a 10-year bond, then that benefit comes to us. But at the same time, you have to understand there's a capital recovery also. So I'm also getting some capital recovery. So that also goes into the repayment of the debt, which we have ordered for funding of that particular asset.
The next question is from the line of Umang Shah from Kotak Mutual Fund.
I just have a couple of them. One is, from what I understand from the discussion so far, it appears that should we understand that capital is constraint to growth and probably then in that case, why not probably raise more equity and bring our gearing ratios down and probably look at growth. Is that an option for us?
No, no, no. I think let's clarify to you that I said that since we were going so far, so we as a company thought that let it cooled down rather than putting sing more equity. I mean that is not a constraint at all. In fact, to tell you the fact, MOR has already approved ourselves INR 8 lakh crores of -- let's hear from [indiscernible].
Now my current debt equity is leveraging is 7.83. So there's absolutely no constraint for further growth, and plus I'll be adding. And the capital, this year, we are, as you know, since my exposure is -- more than 99% exposure to MOR. My capital adequacy is more than 700%. So there's absolutely no constraint with respect to equity for the growth. And further, every year, I'm adding to my network, which will give me further headroom for the growth. So as far as -- the capital requirement is absolutely none for any capital institution for growth. So we are very comfortable [indiscernible].
So I want to add to you, it is more than the equity, if you understand. our the railway assets, we don't do a lot of appraisal. So it's all sales coming from the government almost sovereign. So we never had a very big original team with us that was not required at all. So my strength lies in bringing in the cheapest fund. So my resource mobilize team is very, very renowned and they are very good at bringing the money. Now that we are trying to foray into the lucrative business, I would say, real ways. Our focus now lies on building up our business development team and appraisal team. In fact, in the railways, I have the expertise of 5 years in appraisal itself working at canal side OPP and EDR. We did with general electricals and also for core [indiscernible] factories. So those expertise are brought in, and we are now already in the process of creating a very robust appraisal team, taking all the talent from the market in our team. And this appraisal team wants it in place, it already is a work in progress in a very fast manner. We will be looking at the lucrative project of the railways and this remember is mainstay. The only thing that you mentioned that less there clarification by January and February about this FY or next FY what ticket size we are getting for the government. So as far as equity is concerned, there is no concern at all. And in fact, in a couple of years, we have added more muscle to our network. Now it is more than INR 50,000 crores. So there is no issue on that count. I hope I have clarified.
Yes, sure. This is quite helpful, sir. In fact, for my second question, you have sort of partly answered, which was in terms of building capabilities as we try to kind of look at funding projects outside the railway infrastructure ecosystem. Sir, are there any specific areas of infrastructure, which you have already identified? And the second part of the question was regarding the private sector exposure, right? I mean, so far, as you rightly said, we have been operating in an environment where the exposures have been almost over and right, 0 risk. However, if we just go back in history and if you look at some of the other state-owned NBFCs in there, and their experiences along with private sector, private sector infrastructure companies. Clearly, that has been a bit more right? So how should we look at you look at it in terms of strategy, in terms of our ability to underwrite and intend to underwrite a private sector exposures?
On the lighter win, this company is -- has brought me here in CMD, and I always came that with my government experience of 30 years and delivering at a fast pace within the ring fence of 3 Cs that is CBIs, CBC and CAD. We have developed expertise of doing the right kind of appraisal and not being a rash in getting any kind of business. So that is expertise that I have brought, and this is something I'll inculcate in my team down below. Having said that, there is no signal to anything. Every business has to be evaluated in its proper manner. We'll be looking at -- as I -- I have been telling in all my questions and answers that we'll be looking for the quality of assets. We are a zero-debt company, and we would like to maintain that kind of that good thing that we have with us that we revamp that. So obviously going ahead even in the sectors outside railways, we will be very, very handsome. I'm not in strictly not a good word. We're very, very handsome and prudent in analyzing the kind of quality of assets that is being offered to us. We will be very attractive in offering a rate to asset, which is very good in ratings for the fact that for me, I'm used to offer railways at 40 bps. So just I'm giving you a flavor. I'm not giving you the numbers that this is a number I'm going to give. So please don't quote me as the kind of numbers I'm giving. But say in comparison to 40 bps, even 150 bps, even 120 bps sounds very nice. So we are preparing answer for that. And our motor will remain that. We will look for the very good quality of asset. And I assure you that RSV will be having one of the best appraisal teams available with the mix of government people who have done appraisal as well as people from the industry who have been experienced in doing the appraisal, right? From the CPFC, we are open to take people from the private also. One is a business team, which we already in progress of getting formed. We already have a team and we want to strengthen the team. We'll be looking at all kind of business available. You mentioned in terms of privating, my mandate doesn't stop me from giving it to anybody. But having said that, we will remain in the similar manner as I said, we do want to play 2020 match. We are a very responsible company, and we are very much answerable to our shareholders. We have been playing a test match kind of very disciplined, knowledgeable and good business kind of thing that we'll do. And those things and those numbers will unfold quarter after quarter in our business because we need to work our talk. And this is a [indiscernible] has started every quarter, you see that the growth is there and there is also an assurance that we won't be landing in an asset which is going to be back. This is the most of that we will take forward in doing the business in the coming quarters and the years.
Perfect. That answers my question. And just the last one, which is sort of related to the first question, which I asked. Sir, we have now IRFC is now listed for quite some time. And is there any time line which the Board has decided or discussed with SEBI as far as the minimum public shareholding is concerned. So is there any dilution which can happen around the corner to bring down the promoter shareholding to below 75%?
So Naman, that's a very general question. But as the same deals company, I won't be answering this. This question goes to my promoters. So better throw this question to deepen Secretary, I'm sure they are doing something, but it is for them to answer this question. But as you know, series are sent for everybody. We are not out of that for you. So whatever saving guidance are there, that is applied on everybody. And our job as a management of the company is to see to it that we are doing good business. We are doing a solid business, and we are doing a risk-free business. So this management is committed to that. So far as diluting the shares are concerned, total limitations are there and this particular question will be answered by [indiscernible] secretary and not from me.
[Operator Instructions] The next question is from the line of Sanket Chheda from DAM Capital Advisors Limited.
Sir, the answer has been elaborate. Just on one thing that you bring allude to is the specifying maybe your growth intentions or putting the number to it. But just some trends would there be useful. Maybe we will look at least growing by 20%, 25% entire AUM, maybe 20%, 18% to 20% would also be quite a meaningful number on our base. And of that, say, how much could be the new infra pie or the other lending besides railways?
So Sanket, we won't be putting any numbers as I clarified to you, that's not the intent of the management. Management can give us what kind of business is coming on the plateau. But I think discussing very elaborate a about government business as well as the palate business. I've done detailed talking on that. Number two [indiscernible] surely not put. As I mentioned to you that so far as the numbers come from the government, those numbers not be kept secret. Those numbers will be coming in the month of January. And of course, in the month of February, when we take the budget on profitability. So I think if you are so keen about numbers, let us of patients, it's not far off. It's that part business. Part B business, as you know, any kind of arrangement, MOU or the business we are getting from the other side, immediately goes to the -- both of the exchanges. And every shareholder is aware of that. Like NTPC, the moment would be did it the very same day we posted on exchange. So let's follow up stakes on the exchanges. Anything coming on those sectors outside the government [indiscernible] will be surely. And on timely, will be postpaid on exchanges. Numbers, I'll refrain from quoting as we do in the government part.
[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments. Thank you, and over to you.
So thank you Sanket, and thank you, DAM, for making this good beginning with us for the new board. I'm sure, going forward, there'll be bringing new insights and new facts and figures for our shareholders through you. Thank you all. And let's -- with that, we meet on a very high note and a positive note for the next quarter. Thank you.
Thank you.
Thank you.
On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.