Shares of a large-cap railway company rallied 50 percent in merely three sessions to touch a record high of ₹ 75.70 apiece on the National Stock Exchange (NSE). Its shares opened at ₹ 50.35 apiece on Friday, September 01, 2023, and settled at ₹ 72.25 apiece on Tuesday, marking a massive rally.
Incorporated in 1986, the Indian Railway Finance Corporation (IRFC) borrows funds from the financial markets to finance the acquisition/creation of assets which are then leased out to the Indian Railways as finance leases.
A combined 1419.29 million shares changed hands on the counter in the past three sessions, as compared to 313.53 million shares in the five days preceding this period.
According to a report by BQ Prime, more than 6.13 crore shares or 0.5 percent equity changed hands in multiple large trades at a price band of ₹ 58.10 and ₹ 66.90 apiece. The buyers and sellers were not known immediately.
With a market capitalization of ₹ 87,115 crores, IRFC is a large-cap company. The company has a low return on equity of 5.43 percent. Its shares were trading at a price-to-earnings ratio (P/E) of 13.97, which is lower than the industry P/E of 21.53, indicating that the stock might be undervalued as compared to its peers.
In the past six months, the company’s share price increased by 156.21 percent, thereby delivering multibagger returns. Thus, if an investor had invested ₹ 1 lakh in the company’s shares six months ago, the value of their holdings would have been ₹ 2.56 lakhs today!
The President of India through the Ministry of Railways owns an 86.36 percent stake in the company followed by retail investors with 10.48 percent, domestic institutions with 1.25 percent, foreign institutions with 1.14 percent and mutual funds with 0.77 percent.
Written by Simran Bafna
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