IRFC Share Price 28% in 2 Days, Hitting Record High with Market Cap at ₹80,000 Cr

Indian Railway Finance Corporation share price (IRFC Ltd) have been on an impressive upward trajectory, marking their sixth consecutive session of gains. On Monday, the stock surged by an astounding 20%, reaching a fresh 52-week high of ₹66.78. Year-to-date (YTD), the multi-bagger scrip has witnessed an impressive surge of 102.98% over the past year, it has soared by an astonishing 202.17%.

The driving force behind this remarkable performance is the Ministry of Railways' pursuit of Cabinet approval for a massive ₹5.25 lakh crore investment program spanning from 2024 to 2031. As of the latest trading data, IRFC was trading higher than various moving averages, including the 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came in at 89.41, indicating an overbought condition, as a level above 70 is considered overbought. Despite the remarkable surge, some analysts have a target price of ₹44, suggesting a potential downside of 35%. 

IRFC's Recent Surge and Market Capitalization

IRFC share price have seen a significant surge in recent trading sessions. On September 4, 2023, the stock reached an all-time high of ₹66.90 on the National Stock Exchange (NSE). Trading volume was notably high, with 37,83,05,034 shares traded on the NSE. This remarkable performance has propelled IRFC's year-to-date gains to 103.6%  and its increase since its listing on January 28, 2021, to 169%.

In the past five days alone, IRFC shares have appreciated by approximately 35%, and over the past 30 days, the gain has been an impressive 48%. This surge in share price has elevated IRFC's market capitalization to over ₹86,056 crore. IRFC is set to hold its 36th Annual General Meeting on September 22, 2023. 

In August, reports emerged indicating that the Indian government is considering reducing its 86% stake in IRFC through an offer-for-sale (OFS) to meet SEBI's Minimum Public Shareholding norm. In its June Standalone quarterly results, IRFC reported an over 18% year-on-year increase in revenue to ₹6,679.17 crore, while profits declined by 6.34% to ₹1,556.57 crore. The company's EBITDA grew over 18%to ₹6,651.77 crore.

IRFC's Strategic Role and Future Outlook

Indian Railway Finance Corporation Ltd (IRFC) plays a vital role in financing the acquisition or creation of assets that are subsequently leased out to the Indian Railways or entities under the Ministry of Railways. As a Schedule ‘A’ Public Sector Enterprise under the Ministry of Railways (MoR), IRFC has been instrumental in supporting the expansion of the Indian Railways through financing a significant portion of its annual plan outlay.

IRFC's outlook for FY 2023-24 focuses on strengthening its robust business model and fostering a strong relationship with the MoR. Over the years, the company has witnessed substantial growth, with cumulative funding to the railway sector surpassing ₹5.50 trillion and Assets Under Management reaching ₹4.66 trillion as of March 2023.

IRFC has also signed strategic Memorandums of Understanding (MoUs) with RITES and India Infrastructure Finance Company Ltd. (IIFCL) to enhance cooperation in financing and developing railway infrastructure projects. With its current market capitalization exceeding ₹80,000 crore, IRFC has become more valuable than other major railway companies like IRCTC and Container Corporation of India (CONCOR). Since its listing in January 2021 at a market capitalization of ₹32,000 crore, IRFC's stock has experienced remarkable growth, nearly doubling in the last six months.

Conclusion

IRFC has experienced remarkable stock price growth due to positive sentiments around the Ministry of Railways' investment program. Analysts advise caution due to its overbought status. IRFC's role in financing railway projects and strategic partnerships bode well for future growth.