Indian Railway Finance Corporation Ltd

Dear Shareholders,

It is with immense pride and optimism that I present to you the 38^th Annual Report of Indian Railway Finance Corporation Limited (IRFC)—the cornerstone enabling India's transformation into a global economic powerhouse. This year's message is more than a routine review; where IRFC not only consolidated its position as the veritable financial backbone of the Indian Railways but also embarked decisively on a journey of strategic diversification and sustainable value creation.

I am thrilled to share that we have achieved our highest-ever revenue of H27,152.14 Crore in 2024-25 with an annual profit of H6,502.00 Crore. We have maintained a strong CRAR of 672.85% along with zero NPAs, underscoring our financial resilience. Our prudent financial stewardship enabled us once again to deliver robust returns to all stakeholders, evidenced by a record total dividend payout exceeding H3,000 Crore, while maintaining one of the lowest borrowing costs among leading CPSEs.

A defining landmark of the year was the conferment of the illustrious "Navratna" status upon IRFC by the Government of India—joining the elite cadre of only

26 Central Public Sector Enterprises to receive this honour. This recognition is a testament to IRFC's consistent track record of financial stability, operational excellence, and strategic foresight, which has firmly positioned the Company as a trusted financing arm of Railway Eco-system. IRFC is not just another NBFC—we are the exclusive financial partner to the one of the world's largest public transport network. As India sets its sights on Viksit Bharat 2047, IRFC stands as the nation's growth multiplier, ensuring that every rupee invested propels the vision of a connected, sustainable, and digital India. With the sovereign's full trust and the honor of Navratna CPSE status, our strategic autonomy and agility have never been stronger.

I invite you to journey further through this report, confident that our collective achievements this year are a harbinger of even greater successes to come. Together, we are not just enabling trains to run—we are building the financial rails upon which India's future progress will speed ahead.

Amidstavolatileglobaleconomiclandscape, the Indian economy demonstrated relatively strong performance. In FY 2025, it retained its position as one of the world's fastest-growing economies, recording a GDP growth rate of 6.5%. This growth was driven by robust sectoral performance such as financial services, strong private consumption, and proactive government policies. Timely interventions by the Indian Government played a pivotal role in improving the overall business environment. During the reported year, 26 Navratna Central Public Sector Enterprises (CPSEs) were operational, reflecting a supportive environment for key public enterprises. Additionally, H11,11,111 Crore was allocated for capital expenditure in the Union Budget 2024–25, underscoring the Government's continued focus on infrastructure development. This included a provision of H1.5 lakh Crore in long-term, interest-freeloanstopromoteinfrastructure investment by state governments. Major initiatives encompassed the expansion of highways and expressways, along with railway electrification projects.

Aiming to become a $30 trillion economy by 2047, the Indian Government is actively transforming the country's logistics ecosystem through a reimagined infrastructure strategy, focused on creating a smart and interconnected logistics network.

Looking ahead, India is expected to continue its strong growth trajectory. By 2025, India has already become the fourth-largest economy globally, with the potential to rise to third place—surpassing Germany—by 2028. This forecasted growth is likely to be supported by rising consumption, driven by declining inflation and tax incentives introduced in the Union Budget 2025–26.

Indian Railways (IR), one of the world's largest rail networks, is the lifeline of the nation, connecting its vast and diverse landscapes. It plays a crucial role in the nation's economy by facilitating the movement of passengers and freight across the country.

Indian Railways achieved a record freight loading of 1617.4 MT in FY 2024-25 with a revenue of 2.64 lakh Crore. With a strong focus on providing world class travel experience, boosting freight efficiency, the Indian Railways has solidified its position as a vital engine for national progress. The key focus areas for 2025-26 budget are safety, capacity augmentation, customer amenities and rolling stock upgradation. The best ever capex utilization of 2.62 lakh Crore was achieved in FY 2024-25 which is leading to development of modern stations, state-of-the-art trains and innovative safety systems showcasing the technological prowess and uplifting the passenger experience.

Indian Railways has taken a paradigm shift with introduction of Vande Bharat trains with over 136 services currently running, newly launched Namo Bharat, Amrit Bharat and soon to be launched Vande Sleeper variant. Complementing this technological leap, the PM Gati Shakti Master Plan propels integrated multimodal connectivity and infrastructure synergy, reinforcing the momentum towards a modern, efficient rail network.

Aligned with the Government of India's flagship programs—including the PM Gati Shakti Master Plan, Dedicated Freight Corridors, the Amrit Bharat Station Scheme, next-generation trains like Vande Bharat and Namo Bharat, and large-scale network expansions, IRFC stands as a trusted financial partner, steadfastly enabling the modernization and expansion of Indian Railways. Our continued support ensures seamless execution of these transformative projects—driving connectivity, facilitating economic growth, and advancing the national vision of a Viksit Bharat by 2047.

The Indian Government has set an ambitious target for Indian Railways to become a fully "Green Railway"—achieving net zero carbon emissions by 2030—through complete route electrification, adoption of renewable energy, and energy-efficient practices. Sustainability and green energy remained at the core of Indian Railways' modernization strategy. In this transformative journey, IRFC has rapidly diversified into renewable energy financing, supporting solar, wind, and hybrid projects to propel both the Indian Railways and the nation toward its clean energy goal of 500 GW by 2030. Notably, IRFC has entered into an agreement to finance H5000 Crore to NTPC Renewable Energy Limited, which holds a Power Purchase Agreement (PPA) with the Ministry of Railways for green power supply, exemplifying its commitment to green energy partnerships.

Acting as a key financial catalyst, IRFC's expanded mandate and innovative green funding mechanisms ensure that the vision for carbon neutrality, sustainable infrastructure, and modern, interconnected rail transport becomes a reality—fortifying IRFC's role as a pillar of India's progress in building a green, future-ready economy.

The Company enters Memorandum of Understanding (MoU) with Ministry of Railways (MoR) every year wherein Company is evaluated on various financial and non- financial parameters. Based on its performance, the Company has been rated ‘Excellent' by the Department of Public Enterprises (DPE) for the year 2023-24.

We have consistently demonstrated robust financial performance, anchored in our mastery of procuring funds at astutely competitive rates. This strategic acumen has enabled us to sustain an exceptionally low cost of borrowing. Moreover, our enduring and collaborative partnership with the Ministry of Railways continually fortifies a low-risk profile, thereby profoundly amplifying our financial stability. FY 2024–25 was yet another year marked by strong financial results. Let me present some of the key performance highlights of your company during the year 2024-25:

• Revenue from operations has increased by H503.51 Crore to H27,152.14 Crore in 2024-25 from H26,648.63 Crore in 2023- 24 (^ 1.89% YoY).

• Profit before Tax (PBT) stands at H 6,502.00 Crore vs H6,412.11 Crore for the previous year (^ 1.40% YoY).

• Profit After Tax has risen to H6,502.00 Crore as compared to H6,412.11 Crore (^ 1.40% YoY).

• Earnings Per Share (EPS) reached to H 4.98 (face value of H10/-) as against H 4.91 in the previous financial year.

• Net worth of the Company as on March 31, 2025 stands at H52,667.77 Crore vs H49,178.57 Crore (^ 7.09% YoY).

• A total dividend of H3,005 Crore was paid during the FY 2024-25.

• Disbursements amounting to H731.27 Crore were made to entities other than MoR.

• The average cost of incremental medium & long-term borrowing during the year was 7.07% p.a. payable semi-annually.

• Nil income tax payment showcasing optimized tax position.

• Nil NPA status maintained throughout with pristine asset quality.

• Capital Adequacy Ratio at 672.85% against minimum requirement of 15%.

During FY 2024-25, no disbursement was made to the Ministry of Railways (MoR) due to a ‘NIL' target allocation for the year. However, disbursements amounting to H731.27 Crore were made to entities other than MoR. This included H31.27 Crore to NTPC under a finance lease for BOBR rakes under the General-Purpose Wagon Investment Scheme (GPWIS) of MoR - The company's first project under its business diversification initiative beyond MoR. Additionally, H700 Crore was disbursed to NTPC Renewable Energy Limited, which has a Power Purchase Agreement (PPA) with MoR for the supply of green energy. For leasing of Project Assets, there is an initial Moratorium period of 5 years and MoR is not required to pay the lease rent in moratorium period. Further, during the moratorium period company recognises on annual basis the finance cost as disbursement which gets added to the AUM of the company.

Borrowings during the year include Taxable Bonds worth H27,240 Crore (Previous year H22,940 Crore), Rupee Term Loans of H3,500.00 Crore (previous year H5,980 Crore) and 54EC bonds of H1,877.30 Crore (previous year H2,064.34 Crore). The company had also prepaid high cost long term loan of H29,200.00 Crore from lower rate borrowings.

Company had elected to exercise the option permitted under section 115 BAA of the Indian Income Tax Act, 1961, due to which the taxable income under normal assessment is NIL. Also, the Company is outside the scope and applicability of Minimum Alternate Tax (MAT) provision under section 115 JB of Income Tax Act. Accordingly, no provision has been made in the accounts for the FY 2021-22, FY 2022- 23, FY 2023-24 and 2024-25 as well.

During FY 2024–25, the Board of Directors declared the first and second interim dividends at the rate of 8% each (i.e., H0.80 per share) on 13,06,85,06,000 fully paid-up equity shares of H10/- each. The dividends were paid to shareholders on 27^th November 2024 and 27^th March 2025, respectively.

The total dividend paid during the FY 2024-25 amounts to H3,005 Crore (Final Dividend FY 23-24, 1^st Interim Dividend and 2^nd Interim Dividend FY 24-25)

Company considers good corporate governance practices a sine qua non for sustainable business that aims at generating long term value for its shareholders and all other stakeholders. The Company believes that transparency, integrity, and accountability are integral to building stakeholder trust and ensuring enduring success. In line with this philosophy, IRFC places strong emphasis on the continuous enhancement of governance practices, particularly among Central Public Sector Enterprises (CPSEs). In pursuance of this philosophy, your Company continues to comply with the ‘Guidelines on Corporate Governance for Central Public Sector Enterprises' issued by Government of India, Department of Public Enterprises (DPE). Further, company looks upon Corporate Governance as an enterprise-wide endeavour targeted at value creation in the form of striking optimum balance between the profit it earns for its Shareholders and the spread it charges from Ministry of Railways on the cost of funds transferred to them. This is sought to be achieved by conducting the business in a professional manner, using a combination of delegation and accountability; focused attention and transparency in operations of the Company; skill upgrades through need based training, etc.; and high level of investor / lender satisfaction through timely debt servicing and grievance settlement.

Further, IRFC ensures compliance with the provisions of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI), to the extent applicable. The Company's equity shares, and non-convertible debt securities are listed on the stock exchanges, and it maintains all disclosure and governance obligations as prescribed. As part of its compliance framework, IRFC regularly submits quarterly corporate governance reports to the DPE within the stipulated timelines.

During the financial year 2024-25, the Company in accordance with the provisions of section 135 of the Companies Act, 2013 & rules made thereunder was required to spend H125.58 Crore, being 2% of its average net profits for the last three financial years.

The Company has approved a total of 52 projects with a total outlay of H125.58 Crore. Whereas the amount allocated towards ongoing projects amounting to H124.47 Crore would be disbursed on receipt of bills/ claims from the implementing agencies in future and the same amount has been transferred to the ‘CSR Unspent Account' maintained with Scheduled Bank in terms of section 135(6) of the Companies Act, 2013. The Company is committed to promoting Health and Nutrition as the theme for focused intervention, as mandated by the Department of Public Enterprises. In line with this, IRFC contributed approximately 61.10% of the total CSR expenditure towards ‘Health & Nutrition' during FY 2024-25.

CSR activities proposed for the FY 2025-26: For the financial year 2025-26, the Company would be required to spend approx. H128 Crore. The details of all the projects/ activities will be provided in the next Annual Report.

Risk management is crucial for IRFC's operations, ensuring financial health and growth. The frameworks for identifying, assessing, and mitigating risks have been strengthened. The updated Credit Appraisal Policy supports a strong lending process. IRFC has undertaken a process of diversification across sectors and borrowers, thereby minimising credit concentration risk and enhancing portfolio stability. We are following a risk-based pricing strategy which aligns credit products with inherent risks, protecting shareholder value. To strengthen the compliance and risk mitigation plans, the company has established dedicated Compliance Verticals under Head of Internal Audit, Chief Risk Officer and Chief Compliance Officer. We are strongly committed to ensuring high regulatory compliance, maintaining transparency and a strong reputation within the financial and railway sectors.

Company has taken several strategic steps to diversify its lending portfolio. IRFC began funding initiatives beyond MoR during FY 2024–25, under its mandate of financing for activities with forward and backward linkages to the railways. The company made significant progress this year, including the sanction of a H700 Crore finance lease for NTPC's BOBR rakes and a H5,000 Crore term loan to NTPC Renewable Energy Limited, reinforcing our presence in the renewable energy sector. We also signed an MoU with REMC to support Indian Railways' green energy initiatives. Furthermore, IRFC emerged as the lowest bidder for H3,167 Crore financing of the Banhardih Coal Block for PVUNL, with the sanction currently in process.

In alignment with the Government of India's vision of a future-ready, inclusive, and modern railway network, IRFC is actively broadening its financing footprint. Beyond its core role in railway asset financing, IRFC is expanding into sectors having forward and backward linkages to railways, such as power generation and transmission, mining, fuel, coal, warehousing, telecom, hospitality etc. The Company is taking several strategic steps to diversify its lending portfolio and started funding for projects other than MoR under its mandate of financing adopting "whole of Govt. of approach keeping Railways at its centre."

The Board of Directors had approved borrowing limit of H60,000 Crore for FY 2025-26 for meeting the funding requirement of Indian Railways, if any, new business activities, refinancing of existing loans and for other general corporate purposes. As we step into FY 2025-26, IRFC stands at a defining crossroads, bolstered by its recent elevation to Navratna CPSE status with a greater financial autonomy. IRFC's transformative vision is now powered by a clear roadmap: ambitious business diversification beyond core railway financing, bold initiatives to foster India's sustainability agenda, and an unwavering commitment to corporate governance of the highest global standards. We are primed to leverage our scale, credit strength, and deep sectoral expertise to fuel the nation's aspirations of a "Viksit Bharat" by 2047.

It is with great pride and humility that I acknowledge the unwavering support and trust bestowed upon IRFC by our valued shareholders, debenture-holders, investors, and lending institutions, our customers and partners, especially Indian Railways, for their steadfast collaboration and longstanding association during the financial year 2024–25. I extend my heartfelt gratitude to the Hon'ble Minister of Railways and Hon'ble Minister of Finance, along with all officials of their ministries, for their continued guidance and vision. Their insights and leadership have been instrumental in positioning IRFC as a key enabler of infrastructure transformation. I also wish to thank the Department of Public Enterprises (DPE) and Department of Investment and Public Asset Management (DIPAM) for conferring the prestigious Navratna status upon IRFC— an acknowledgment of our operational excellence, financial strength, and strategic foresight. We are grateful to all stakeholders who contributed to this significant milestone. I wish to place on record my appreciation for the Company's Board of Directors for their strategic oversight, our Auditors and the Comptroller & Auditor General of India (C&AG) for their enduring commitment to upholding the highest standards of transparency, and our employees whose professionalism, dedication, and allegiance have been critical in navigating challenges and delivering consistent performance. We remain deeply committed to driving the nation's growth journey through strategic financial solutions and prudent governance.

Regards, Sd/-

Chairman and Managing Director & CEO DIN: 07518387