This PSU stock hit over 13-year high on Feb 6; zooms over 100% in 3 weeks

IFCI news: Shares of IFCI hit an over 13-year high of Rs 65.28, freezing at 5 per cent upper circuit on the BSE on Tuesday

Shares of IFCI hit an over 13-year high of Rs 65.28, freezing at 5 per cent upper circuit on the BSE on Tuesday at 02:07 PM, with only buyers being seen on the counter. As many as 43.5 million shares of IFCI have changed hands and there are pending buy orders for 2.12 million shares on the NSE and BSE, data shows.

In the past three weeks, the stock of the state-owned financial institution has more-than-doubled, zooming 108 per cent from a level of Rs 31.42 on January 16. It has skyrocketed 623 per cent from its 52-week low price of Rs 9.03 touched on March 28, 2023. Currently, the stock is quoting at its highest level since January 2011. It had hit a record high of Rs 121.20 on December 17, 2007.

As of December 31, 2023, the Government of India, through the President of India, held a 70.32 per cent stake in IFCI. Retail individual shareholders held 19.39 per cent holding, followed by foreign portfolio investors (2.08 per cent), Life Insurance Corporation of India (1.95 per cent) and bodies corporate (1.06 per cent), the shareholding pattern data shows.

During the financial year 2022-23 (FY23), the Government of India infused Rs 400 crore towards subscribing to the share capital of IFCI. The company, in its FY23 annual report, said that it is focusing on measures for recovery in order to maximise recovery under Insolvency and Bankruptcy Code (IBC) route and other modes, expediting divestment of non-core assets and strengthening of the advisory business, which is expected to improve the cash flow of the company and make the balance sheet healthier.

IFCI has been appointed as the Nodal Agency/ Project Management Agency (PMA) for the Production Linked Incentive (PLI) and other Schemes of Government of India.

IFCI is also associated with India Semiconductor Mission as Agency for Techno Financial Appraisal, Due Diligence and Verification for (i) Scheme for setting up of Semiconductor Fabs, (ii) Scheme for setting up of Display Fabs and (iii) Scheme for setting up of Compound Semiconductors / Silicon Photonics / Sensors Fab/ Discrete Semiconductors Fab and Semiconductor Assembly, Testing, Marking and Packaging (ATMP)/ Outsourced Semiconductor Assembly and Test (OSAT) facilities in India.

"The company has shifted its focus from lending activities to fee-based business. Besides managing the Sugar Development Fund (SDF), the company is also managing and monitoring the implementation of the PLI schemes of the GoI. The company earned Rs 59 crore as at March 2023, and sees the fee-based business as a steady source of revenue," Brickwork Ratings had said in its rating rationale.

IFCI has managed its debt repayments during the last few years by running down its standard loan book, making recoveries from non-performing advances (NPAs), and divesting its non-core assets.

"However, with the significant reduction in the standard loan book and given its limited scale in relation to the size of the repayment obligations, the company's ability to incrementally manage debt repayments out of the residual performing book will remain a challenge," ICRA had said in May 2023 rating rationale.

Moreover, IFCI will have to rely on timely support from the GoI, apart from recoveries from NPA accounts or divestment of key subsidiaries, to service its upcoming repayment obligations, the rating agency said.

Financially, IFCI's standalone reported net losses during FY23 reduced to Rs 287 crore as against Rs 1,991 crore in FY22 driven by recoveries in FY23 and impairment reversal.

In the first half (April to September) of financial year 2023-24 (H1FY24), IFCI had posted a net loss of Rs 77 crore as compared to a net loss of Rs 123 crore in H1FY23.

On consolidated basis, IFCI had posted net profit of Rs 43.41 crore in H1FY24 as against profit of Rs 12.32 crore in H1FY23. The company recorded consolidated net loss of Rs 119.78 crore in FY23.

Meanwhile, the board of directors of IFCI is scheduled to meet on Friday, February 9, 2024 to consider and approve quarterly financial results for quarter ended December 31, 2023. (Q3FY24).