IRFC zooms 14% to a new high, stock up 287% in a year

Shares of Indian Railways Finance Corporation (IRFC) surged 14 percent to hit a record high on January 15. The stock is now up nearly 400 percent from its IPO price of Rs 26. The multibagger stock debuted at issue price in 2021 and was trading around in the Rs 26 – 30 range till April 2023. However, since then, the stock has more than tripled and is continuing to hit fresh highs.

The Indian Railways Finance Corporation (IRFC) stock surged 14 percent in the morning trade to hit a record high of Rs 129.85 on January 15 morning, extending its healthy run of the last few months.

The government’s focus on the sector, fresh capital infusion and an expected strong December quarter are among the reasons for the rally in the IRFC stock, analysts said.

The stock, which listed in 2021, is now up nearly 400 percent from its issue price of Rs 26, with most of the gains coming in over the last year.

The stock traded in the Rs 26-30 range till April 2023 but has since more than tripled as it continues to hit fresh highs.

The government has declared a fresh investment of around Rs 7 lakh crore for the development of rail infrastructure, which is expected to benefit PSUs such as IRFC.

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At 10.10 am, IRFC was trading 13 percent higher at Rs 128.65 on the National Stock Exchange (NSE). The stock has gained 27 percent, so far, this month.

In the last six months, the PSU stock has surged 295 percent and a whopping 400 percent in two years.

On the weekly chart, the IRFC broke above the Rounded Bottom pattern at Rs 92 in mid-December and consolidated for three weeks. Last week, it surpassed the small consolidation range between Rs 105 and94, signalling a continuation of the uptrend post-breakout, said Rajesh Palviya, SVP Research (Head Technical & Derivatives), Axis Securities.

The daily and weekly relative strength index (RSI) indicators are in a bullish mode, indicating rising strength, Palviya said. “Investors should buy, hold and accumulate this stock with an expected upside of Rs 123-130 with downside support zone of Rs 108-103 levels,” he said.

IRFC is a Miniratna status public sector company under the railways ministry. The government owns 86.36 percent stake in IRFC, foreign investors 1.14 percent and domestic mutual funds own 0.5 percent in the company.

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More than 260 crore shares of IRFC are set to be freed up for trade across January to April this year, according to a Nuvama note. Around 20 percent of IRFC’s outstanding equity will become eligible for trade once its lock-in period ends on January 29.

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