IFCI slips 4%, down 20% in two trading sessions

NEW DELHI: IFCI slipped over 4 per cent in trade on Monday, after registering a 16 per cent fall on Friday after the government approved conversion of Rs 923 crore debentures held by it in the company into equity, which will increase its stake in the financial institution to 55.57 per cent.

At 10:28 am, IFCI was trading 2 per cent lower at Rs 28.70. It has hit a low of Rs 27.80 and a high of Rs 29.05 today.

Industry experts are of the view that the stock is likely to face further headwinds as the book value of the stock has fallen to 27. In the past the stock has traded around 0.5xBV, hence traders eye the stock to move in a range of Rs 15-16 levels.

“IFCI book value fell to Rs 27 per share, which is negative for the stock and it has already corrected over 14 per cent in trade today. We expect the stock to correct more heading towards derivative settlement,” A K Prabhakar, Senior Vice President - Equity Research at Anand Rathi, said.

Sonam Udasi, Head of Research, IDBI Capital, in an interview with ET Now last week said, “Post conversion, the book value has shrunk and even at this price, it is trading at about 1.7 times.

“So, the stock will continue to face headwinds because if we compare it with other PSUs, the valuation should fall compared with other institutions in the same space,” added Udasi.