The IFCI stock is now in a free fall. On Thursday, it fell by 23.29 per cent or Rs 23.30 to close at Rs 76.75 after the company’s expected strategic stake sale fell apart.
However, frenzied unwinding of long positions on the counter saw the stock coming out of the ban period in futures and options (F&O) segment. Analysts expect the stock to settle in Rs 60-70 range, before showing any signs of a pullback on the back of renewed stake sale negotiations.
“The stock could reach Rs 60-70 levels and then the momentum could pick up on news flow about the revival of stake sale news to Life Insurance Corporation or other institutions,” said Sapen Patel, a broker with the Bombay Stock Exchange.
The meltdown in the IFCI share price is bad news for all those who had built positions on the stock in anticipation of the strategic stake sale story. For months, IFCI had topped the volume charts and made frequent entries into the F&O ban list, depicting the frenetic activity in the F&O segment of the stock.
"The stock has been a punters delight. Continuous flow of information on the company managed to keep the stock in limelight," said Arun Kejriwal of Kejriwal Research and Investment Services.
The 10 per cent crash in IFCI shares on Monday was perhaps a strong precursor to what was in store. For investors who have been locked in with the stock at higher levels there seems to be no way out except to hope for the stake sale talk to resurface.
“Fundamentally I do not like the stock. It has been an underperformer for several years and even now it has moving up only on news flows,” said Patel.
A year ago, the IFCI stock was quoting at Rs 10.75. The news of 26 per cent stake sale to a strategic partner and conversion of a part of the institutional debt into equity had put the stock on a different trajectory altogether. It hit a 52-week high of Rs 121.20 on December 17, 2007.