IRFC Surges 14% to All-Time High, Stock Up 287% in a Year

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IRFC Surges 14% to All-Time High, Stock Up 287% in a Year
  • By Divya Singhal
  • 15th January, 2024
  • Loans

In a remarkable display of financial prowess, the Indian Railways Finance Corporation (IRFC) has recorded an astonishing 295% surge in its stock value over the past year, yielding investors nearly fourfold returns. This builds upon an impressive 400% return on investment in the preceding two years.

On January 15, IRFC shares witnessed a noteworthy 14% increase, propelling the stock to a historic high. This surge signifies an extraordinary growth of almost 400% from its IPO price of Rs 26. Despite initial trading in the Rs 26 – 30 range until April 2023, the stock has consistently tripled in value since, establishing a series of new record highs.

During the morning trade on January 15, IRFC’s stock surged by 14%, reaching a peak of Rs 129.85, showcasing its outstanding performance over the past few months.

Market analysts attribute this robust performance to the government’s strategic focus on the railway sector, fresh capital infusion, and anticipated strong performance in the December quarter.

Since its listing in 2021, IRFC’s stock has experienced a staggering 400% increase from its IPO price of Rs 26, with the majority of these gains occurring in the past year.

Despite trading within the Rs 26-30 range until April 2023, the stock has since more than tripled, consistently achieving new highs. The government’s commitment to investing around Rs 7 lakh crore in rail infrastructure development is poised to significantly benefit state-owned enterprises like IRFC.

As of 10:10 am, IRFC was trading 13% higher at Rs 128.65 on the National Stock Exchange (NSE), reflecting a 27% gain in this month alone.

Over the last six months, this public sector undertaking (PSU) stock has surged impressively by 295%, marking an outstanding 400% increase over the past two years.

Technical analysis unveils that IRFC broke above the Rounded Bottom pattern at Rs 92 in mid-December on the weekly chart. Following three weeks of consolidation, it surpassed the small consolidation range between Rs 105 and 94, signaling a continuation of the upward trend post-breakout.

Rajesh Palviya, SVP Research (Head Technical & Derivatives) at Axis Securities, emphasizes that both daily and weekly relative strength index (RSI) indicators are in a bullish mode, indicating increasing strength. Palviya advises investors to buy, hold, and accumulate IRFC stock, anticipating an upside of Rs 123-130 with a downside support zone of Rs 108-103 levels.

IRFC, a Miniratna status public sector company under the railways ministry, is predominantly owned by the government, holding an 86.36% stake. Foreign investors and domestic mutual funds own 1.14% and 0.5%, respectively.

A noteworthy observation by Nuvama suggests that more than 260 crore shares of IRFC are poised for trade between January and April this year. Following the expiration of its lock-in period on January 29, around 20% of IRFC’s outstanding equity will become eligible for trade, presenting new opportunities for investors in the coming months.

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