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IFCI shares gain over 29% this month amid robust Q4 earnings, FIIs increasing stake
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2 min read | Updated on May 27, 2024, 13:49 IST
SUMMARY
IFCI Ltd, a public sector non-banking finance company, has seen its share price jump over 29% this month and 417% in the past year. The rally follows IFCI’s first profit in five years, posting ₹128 crore for FY24. Key triggers include expanded advisory services, capital infusion by the government, and increased FII stake. IFCI provides financial assistance across diverse industries and manages six subsidiaries and one associate company.
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IFCI provides financial assistance for the growth of diverse industries across the country..
The stock has jumped more than five times in the past one year itself. The public sector undertaking (PSU) stock has gained more than 417% in the last one year and around 100% so far in 2024 (year-to-date).
Company turns profitable after five years
The recent rally in the share price has been triggered after the company reported a profit in FY 2023-24 after five consecutive years of losses. IFCI posted standalone profit of ₹128 crore for FY24 compared with a loss of ₹288 crore a year ago. The company reported its last profit in FY18 at ₹468 crore.
The company managed to post a profit after it expanded its government and private corporate advisory services in recent years and curtailed its lending operations due to piling up of bad loans.
The turnaround mainly happened after IFCI was appointed as the project management agency for various production-linked incentive (PLI) schemes launched by the union government.
Capital infusion by govt. and FIIs increase stake
Another major trigger was the capital-infusion in the company in March. IFCI announced in March that its board had approved a proposal for raising up to ₹500 crore through the issuance of equity shares to the government.
Following the capital infusion, the government increased its holding in the oldest financial institution to 71.72% from 70.32% held then.
During the same period, foreign investors increased their stake in IFCI. According to data available on the stock exchanges, FIIs (foreign institutional investors) holding in the company went up from 2.08% in the December quarter to 2.29% in the March quarter.
Established as a statutory corporation in 1948, IFCI currently manages six subsidiaries and one associate company.
It provides financial assistance for the growth of diverse industries across the country. The state-owned company’s operations primarily includes financing projects across industries such as airports, roads, telecom, power, real estate, manufacturing, services sector and other such allied sectors.
Shares of IFCI were trading 1.42% lower at ₹59.1 apiece on the NSE at 1:32 pm owing to profit booking.
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