IDFC cracks 20% in two sessions over lower FII limit

MUMBAI: Shares of IDFC continued to plunge for second straight session after the company announced that it has decreased the limit for the purchase of its equity shares and convertible debentures by Foreign Institutional Investors (FIIs), through primary market and stock exchanges, under the Portfolio Investment Scheme from 74 per cent to 54 per cent of its paid up capital with immediate effect.

“The current foreign shareholding in IDFC is 53.71 per cent. Hence, the company has advised all the custodian banks vide its email dated August 26, 2013 to not make any further purchases through secondary markets on behalf of their Fll & NRI clients with immediate effect," the company said in a filing to the BSE.

According to Avinnash Gorakssakar, Head of Research, Miintdirect.com, the selling in the stock seems to be overdone.

“The kind of numbers IDFC has thrown up in the last quarter and the kind of business model it enjoys, my sense is some stability will come in. The correction definitely seems to be overdone. This is not something to do with the fundamental asset quality or maybe the NPAs of IDFC which are well under control,” Gorakssakar said in an interview to ET Now.

Technical recommendations on the stock:

Mitesh Thacker, Technical Analyst, miteshthacker.com

‘Sell’ IDFC with a target of Rs 86 and a stop loss of Rs 99.

Sandeep Wagle, Founder & MD, APTART Technical Advisory Services

Sell IDFC with a stop loss of Rs 98 for a target of Rs 85. The stock looks weak.



At 10:45 a.m.; the stock was at Rs 86.45, down 8.76 per cent on the NSE. It touched a high of Rs 89.90 and a low of Rs 86.25 in trade today.

In last two sessions, the stock corrected 20 per cent from Rs 103.5 on Friday to today’s low of Rs 86.25.