IRFC Shares Surge to Record High, Market Cap Crosses Rs 2 Lakh Crore Mark

19 Jan 2024 , 03:51 PM

After rising 9% on Friday to trade at Rs 160, shares of Indian Railway Finance Corporation (IRFC) Ltd. are currently trading at a record high. Eight of the last nine trading sessions have seen gains for the stock, which has increased by almost 60%.

Following today’s increase, IRFC’s market capitalization now stands at Rs 2.1 lakh crore, having crossed the Rs 2 lakh crore threshold.

In addition, this indicates that IRFC is worth more than 21 Nifty 50 companies, including Mahindra & Mahindra, BPCL, Bajaj Auto, and others, making it not only the most valuable railway stock.

January was the best month for shares on record for the stock due to its near-60% rise. The stock had previously increased by 53% in September of the previous year.

Following their debut in 2021, IRFC’s shares were dormant for the first two years until surging over 200% in 2023. Before seeing a two-year increase in value in 2023, the stock debuted on the stock exchange at a price lower than its issue price of Rs 26.

With today’s rally, the stock has increased six times from its Rs 26 IPO price.

But it’s important to remember that there isn’t much IRFC sharing available for free on the market. With the government still holding an 86.36% share in the business, the amount of free float on the market is just approximately 13.5%. Since there is no free float available, any movement in the stock price would be quite large.

The government owns a Rs 1.8 lakh crore stake in IRFC based on the current market price.

In a conversation with CNBC-TV18, Gautam Trivedi of Napean Capital stated that NBFCs, particularly IRFC, are appealing right now. IRFC is trading at a price-to-book ratio of 4.5x at the moment.

Ahead of the conclusion of their shareholder lock-in period, IRFC’s shares are likewise soaring.

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