What's behind the 74 per cent rally in IFCI stock in 13 trading sessions?

IFCI stock hit five-month high as it jumped 11 per cent to ₹68 on the BSE on back of two-fold rise in average trading volumes on Wednesday. IFCI has seen a good surge in the last few trading sessions.

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Share price of IFCI today Shares IFCI hit five-month high as they rallied 11 per cent to ₹68 on the BSE in Wednesday’s intra-day trade, on back of two-fold jump in average trading volumes. A combined 121 million equity shares representing 4.4 per cent of total equity of IFCI have changed hands on the NSE and BSE.

 

In past 13 trading days, IFCI stock price has zoomed 74 per cent from level of ₹39.19 on May 9, 2025.  It is quoting at its highest level in calendar year 2025. As on March 31, 2025, the Government of India (GoI) held 72.57 per cent stake in IFCI.

 

What’s behind the 74 per cent rally in IFCI stock?

 

The movement in volume the company's share is completely market driven, and the Company is no way connected with the same, IFCI said in a recent exchange filing. 

 

On May 15, 2025, the Board if IFCI had approved the audited financial statements of the Company as on March 31, 2025 and the same were submitted to the Stock Exchange(s), the company had said.

 

“There is no event, information or announcement, which, in our opinion, has a bearing on the price /volume behaviour of the Company's securities and is not disclosed to the Exchanges,” IFCI said on clarification on increase in volume. READ MORE ON IFCI CLARIFICATION HERE

 

IFCI NPA levels  Meanwhile, IFCI said in March 2025 quarter, the Gross NPA level percentage has decreased and Gross NPA level is coming down in absolute term on account of the company not taking any fresh loan exposure and thereby shrinkage of standard loan accounts. The Capital Risk Adequacy Ratio (CRAR) stands at (-) 23.04 per cent as on March 31, 2025, below the RBI stipulated guidelines.

 

A large proportion of IFCI’s NPAs are under National Company Law Tribunal (NCLT), while some others are in the process of restructuring/resolution outside NCLT. The extent of haircut required on these exposures and consequent adequacy of provisioning will be critical for IFCI’s capitalisation and profitability profile. IFCI’s ability to reduce pressure on the asset quality profile through reduction in the NPA levels will be critical for its credit profile, according to CARE Ratings.

 

Though IFCI is not doing any incremental disbursements, IFCI has been mandated by the government for managing various social upliftment and industrial promotion schemes.

 

However, in view of the persistent asset quality concerns and losses that have led to erosion in its net-worth, IFCI would need substantial equity infusion to be able to meet the regulatory minimum requirements in terms of the capital and to restart the lending business.

 

Being a majority-owned entity by GoI, the availability of adequate, timely and regular support from the government in terms of capital infusion, resource raising and other regulatory matters remains a key rating sensitivity, going ahead, the rating agency said.

 

Meanwhile, on November 22, 2024, IFCI announced that it had received communication from the Department of Financial Services (DFS), Ministry of Finance, Government of India (GoI), granting a in-principle approval to consider the consolidation of the IFCI Group as a way forward for IFCI. This would entail the merger/amalgamation of IFCI and Stock Holding Corporation of India and other Group companies.

 

Post the proposed merger (as outlined above), in ICRA’s assessment, IFCI will continue as the resultant entity and will benefit from the sizeable stake held by SHCIL in the National Stock Exchange, thus improving its financial flexibility. 

 

In this regard, the timing and quantum of the monetisation of the NSE stake and the extent of reduction in IFCI’s debt by the time of the consolidation would remain monitorable for the credit profile of the resultant entity. 

 

ICRA expects that GoI will continue to remain the single largest shareholder in the resultant entity. The rating watch could be resolved once the details of the transaction are finalised and clarity emerges on the resultant entity, its operational profile and financial metrics including capitalisation, leverage, liquidity, etc., as well as the GoI’s stake in the resultant entity.

 

About IFCI

 

The GoI established the Industrial Finance Corporation of India (IFCI) on July 01, 1948, as a development financial institution (a statutory corporation) to cater to the long-term financial needs of the industrial sector. 

 

IFCI’s constitution was changed in 1993 to a company under the Indian Companies Act, 1956, from a statutory corporation. Its name was changed to IFCI Limited with effect from October 1999. 

 

The company’s financing activities covered various kinds of projects spanning airports, roads, telecom, power, real estate, manufacturing, services and other such allied industries. However, IFCI has not lent since FY2022 due to capital and liquidity constraints.