IRFC OFS opens: Navratna PSU stock cracks 5%; should you bid or avoid?

IRFC share price today: Rajesh Palviya of Axis Securities said investor sentiment around IRFC has been subdued for a long time, and today's decline was primarily driven by the OFS announcement.

IRFC share price today: Shares of state-run Indian Railway Finance Corporation (IRFC) declined ore than 5 per cent in early trade on Wednesday after the company’s offer for sale (OFS) opened for non-retail investors.

 

The PSU stock opened at ₹94 on the National Stock Exchange (NSE), down 4.7 per cent from its previous close, and slipped further to a low of ₹93.40.

 

Today's decline marks the second consecutive session of losses for IRFC shares. Rajesh Palviya of Axis Securities said investor sentiment around IRFC has been subdued for a long time, and today's decline was primarily driven by the OFS announcement.

 

 

"The OFS has led to a correction in the stock due to price discovery. The stock could remain under pressure and may witness further consolidation at lower levels," he said.

 

As of 9:45 AM, IRFC shares were trading 5 per cent lower at ₹93.70. According to NSE data, more than 16 million shares of the Navratna PSU changed hands during the first 30 minutes of trading.  IRFC OFS price  Notably, the government has announced to sell up to 2 per cent stake in IRFC at a floor price of ₹91 per share. The floor price is at a discount of nearly 8 per cent from the previous close of ₹98.67.

 

Over 26.13 crore shares, representing a 2 per cent stake in IRFC, will be put on offer in the two-day share sale. At the floor price, the stake sale will fetch over ₹2,300 crore to the exchequer. The OFS will open for retail investors on Thursday.  IRFC OFS: Should investors participate?   Rajesh said that IRFC, technically, was already weak, with a series of lower highs and lower lows, indicating a bearish trend. The government's stake sale, despite the stock's underperformance, may also make investors cautious.

 

"IRFC stock has not delivered meaningful returns over the past year, and the overall structure remains weak," he said.

 

Rajesh added that at this stage, he would suggest retail investors to start away from the OFS and also from the stock as "there are no strong positive triggers visible". "I do not expect IRFC to generate meaningful returns in the near term."  =================================== 

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