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IFCI gains 15% on approval of group consolidation

Stocks
2 min Read Nov 25, 2024
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Shares of IFCI Ltd rose significantly on Monday, gaining 14.7% and reaching an intraday high of ₹66.59 on the Bombay Stock Exchange (BSE). The surge followed the company’s board approval for consolidating IFCI Group entities, which drove strong investor interest in the stock.

Strong performance on BSE amid broader market gains

At 10:02 AM, IFCI's share price was trading 11.39% higher at ₹64.63 on BSE, compared to the Sensex's 1.46% increase to 80,268.99. The company’s market capitalisation stood at ₹16,805.39 crore. IFCI’s 52-week range spans a high of ₹91.39 per share and a low of ₹24.1 per share, underscoring the recent gains in its share market investment performance.

The board's approval for consolidation strengthens outlook

IFCI’s board, in its meeting held on November 22, 2024, granted in-principle approval for the consolidation of IFCI Group companies. This decision aligns with directives from the Department of Financial Services (DFS), Ministry of Finance.

The consolidation will involve merging entities like StockHolding Corporation of India Ltd, IFCI Factors Ltd, VFCI Infrastructure Development Ltd, and IIDL Realtors Ltd into IFCI Ltd. Additionally, several subsidiaries, including StockHolding Services Ltd and IFCI Financial Services Ltd, will merge into a unified entity under the listed company’s umbrella.

A legacy of driving India's industrial growth

Established in 1948, IFCI is a development financial institution created by the Government of India. Over decades, IFCI has offered diverse financial services, including term loans and corporate debt restructuring. 

While initially government-owned, IFCI has transitioned into a publicly listed company with reduced government shareholding. Despite these changes, it remains vital to India’s industrial and economic modernisation.

Remarkable growth in share market investment

In the past year, IFCI shares have outperformed the broader market, gaining 137% compared to the Sensex's 20% increase. The recent surge reflects growing investor confidence in the company’s strategic initiatives and market presence.

Key takeaways

  • IFCI shares rose 14.7% after board approval for group consolidation.

  • Market capitalisation reached ₹16,805.39 crores, with shares trading 137% higher year-on-year.

  • The consolidation aligns with the Ministry of Finance’s directive and aims to streamline operations.

  • IFCI continues to drive India’s industrial growth through strategic share market investments and financial support.