Diversification credit risk
Moving beyond sovereign-guaranteed railway lending to other government entities introduces credit risk, though management asserts a whole-of-government approach with quasi-sovereign counterparties.
IRFC / Q2-FY26 / risks
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Indian Railway Finance Corporation · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
medium
Thin lending margins in competitive environment
Lending at 100-120 bps margin to government entities may be considered thin compared to peers, but management views it as attractive versus the historical 40 bps from railways.
Human resource capability for new business
Building a team for underwriting and monitoring diversified loans is a challenge, but management is hiring laterally and adding consultants.
Potential MAT liability in future
Though management sees no MAT for 5-7 years, the tax exemption from 2020 may eventually expire, impacting profitability.