IFCI hits 52-week high on heavy volumes; stock rallies 73% in six days

The company expects improvement in the asset portfolio quality as well as cash flow of the company, due to various strategic initiatives including measures for recovery were initiated during FY20

Shares of IFCI hit a 52-week high at Rs 10.75 on Thursday after rising 15 per cent on the BSE on the back of heavy volumes. The trading volumes on the counter more-than-doubled with a combined around 40 million equity shares changing hands on the NSE and BSE, till 03:16 pm.

Since November 25, in the past 10 trading days, the state-owned financial institutions' stock price has rallied 73 per cent after the company said it expects improvement in the asset portfolio quality and cash flow.

“Various strategic initiatives including measures for recovery were initiated during the year in order to maximize recovery under Insolvency and Bankruptcy Code (IBC) route and other modes, expedite divestment of non-core assets and strengthen the appraisal and risk management processes and controls, which are expected to improve the asset portfolio quality as well as cash flow of the Company and make the balance sheet of the Company healthier,” IFCI said in financial year 2019-20 (FY20) annual report.

Moreover, the recent impact of Covid-19 has slowed down the judicial process. Further, fresh reference to the National Company Law Tribunal (NCLT) has been put on hold, which will delay the resolution process and has burdened the judicial system with further backlog of pending cases. However, notifying the provisions of insolvency against personal guarantors under IBC is a positive step taken by the Government for proceeding against the guarantors of stressed loan accounts. IFCI is proactively taking steps to initiate personal insolvency to maximize the recovery from NPAs, it said.

IFCI is engaged in project financing infrastructure development debt and equity underwriting and syndication venture capital stock broking and merchant banking factoring asset reconstruction tourism finance micro finance corporate and infrastructure advisory technical consultancy and management education. Financial products include short-term loans, long-term loans, lease financing and structured products: acquisition finance pre-initial public offering (IPO) investment IPO finance and promoter funding.