The ministry of railways has approached the ministry of corporate affairs to fix a tax liability issue of Indian Railway Finance Corporation (IRFC) which is affecting the net worth of the company, making it unattractive for listing. According to a railway official, IRFC finances railway projects which are with the transporter on leases. However, since adequate depreciation returns are not accruing to IRFC, its tax liability has increased. “The tax liability gets booked at around 55% which actually it (IRFC) does not pay but is part of the books. The maximum tax IRFC has to pay is 34%. This (deferred) liability has gone beyond Rs 6,000 crore at present. It is to get relief on this that we have gone to the ministry of corporate affairs,” said a railway official. The official said IRFC may come up for listing in the next quarter as the corporate affairs ministry has given positive response and IRFC is likely to get relief. “It is in the public interest that IRFC gets this relief as it will be good for listing or else Indian Railways will need to infuse equity to get IRFC listed,” added the official.
The ministry of railways plans to list RITES, Ircon International, Indian Railway Finance Corporation (IRFC), Indian Railway Catering and Tourism Corporation (IRCTC) and Rail Vikas Nigam. Container Corporation of India is the only railway subsidiary which is listed as on date. Though the listing process of all five railway PSUs are at various stages, RITES is going to be the first firm to come out with its draft red herring prospectus (DRHP), or the offer document, first. “RITES is ahead of all. It will be the first one to file DRHP which may even happen within this month,” said the official. The government expects to raise at least Rs 500 crore from the listing RITES alone.