IFCI shares jumped as much as 12% on Friday, September 4, reaching a fresh 52-week high as expectations around the National Stock Exchange’s proposed initial public offering gained momentum. The stock touched Rs 107.45 on the BSE after opening at Rs 96.01, compared with its previous close of Rs 95.92.
The state-owned financial services company ranked among the top gainers on the BSE during the session. Friday also marked the third straight trading day in which IFCI shares reached a new 52-week high.
IFCI shares moved above the Rs 100 level for the second consecutive session. Before the latest rally, the stock had not traded above this level since December 2007, when it reached an intraday high near Rs 107.
The stock has now gained around 35% over the past month. Investor activity has increased as the market tracks developments surrounding the NSE IPO and IFCI’s indirect exposure to the exchange.
IFCI owns about 52% of Stock Holding Corporation of India Ltd, or SHCIL. In turn, SHCIL owns about 4.4% of NSE. As a result, developments related to NSE’s proposed public listing have drawn attention to IFCI shares.
The rally followed reports that the Securities and Exchange Board of India could move closer to approving NSE’s IPO documents. SEBI Chairman Tuhin Kanta Pandey had earlier said the regulator was close to clearing the exchange’s draft red herring prospectus.
NSE filed its draft prospectus with SEBI in June. The proposed IPO would involve existing shareholders selling up to 14.89 crore shares, representing about 6% of the exchange’s paid-up equity capital. The offering would consist of secondary share sales rather than the issue of new shares.
Separate reports said that NSE could seek a valuation of as much as Rs 5.26 lakh crore, or about $55 billion. Reports on Friday also said the exchange was targeting a September 25 listing, subject to regulatory approvals and the completion of the IPO process.
The exchange could file an updated DRHP after receiving regulatory approval. Reports also indicated that NSE could announce its IPO price band on September 11.
New India Assurance Company shares also gained sharply during Friday’s session. The stock rose nearly 15% to Rs 224.41 as investors tracked the company’s direct holding in NSE.
New India Assurance owns about 1.42% of the stock exchange. As a result, renewed activity around the proposed NSE listing also increased trading interest in the insurer’s shares.
Meanwhile, NSE shares are expected to list on the BSE if the proposed offering receives the required approvals. BSE shares currently trade on the NSE.
IFCI’s recent rally has pushed several technical indicators higher. Its 14-day Relative Strength Index stood near 71.7. An RSI reading above 70 is commonly described as an ‘overbought’ level and indicates that the stock has recorded a strong rise over a short period.
The stock was also trading above its major simple moving averages, reflecting the strength of its recent price trend. However, the next moves in IFCI shares are likely to remain linked to confirmed regulatory developments surrounding the NSE IPO, including DRHP approval, the price band, and the proposed listing schedule.