The Industrial Finance Corporation of India (IFCI), established in 1948 and headquartered in New Delhi, India, is a leading player in the nation’s financial services industry. Operating in the financial services sector, the company offers a diverse range of financial products and services, catering to the specific needs of various industries.
Over the decades, IFCI has played a pivotal role in fostering infrastructure development and channelizing funds for sectors like power, telecom, roads, ports, oil & gas. Today, it offers a diverse range of financial products and services including corporate loans, project financing, loan syndication, underwriting, and advisory services
As investors seek insights into IFCI’s potential growth trajectory, this analysis delves into potential share price targets for the company across a significant timeframe (2024-2030).
Table of Contents
IFCI Company Overview
Historical Evolution
IFCI was established on July 1, 1948 under the Industrial Finance Corporation Act, 1948. The institution was formed with the objective of providing medium and long-term credit to industrial undertakings in India. IFCI’s initial capital was Rs. 5 crores, fully subscribed by the Central Government.
In the 1950s and 60s, IFCI played a monumental role in financing projects across core infrastructure sectors including power, steel, chemicals, textiles and sugar. Landmark projects financed by IFCI during this nation building phase include Bhakra Nangal Dam, Rourkela Steel Plant, and refineries at Barauni and Koyali.
By the 1990s, IFCI had expanded its portfolio beyond project financing into new areas like equipment leasing, merchant banking, underwriting, housing finance, venture capital funding and investment banking. In 1993, IFCI attained the status of a Public Financial Institution.
The late 1990s and early 2000s saw major changes in India’s financial landscape with the entry of private players across banking, insurance, NBFCs etc. This eroded IFCI’s competitive positioning. To reinvent itself, IFCI expanded into retail finance, capital market activities and fee-based activities. However, its financial health deteriorated due to rising NPAs.
In 2005, the government recapitalized IFCI and reconstituted its Board. Since then, IFCI has undertaken a series of strategic initiatives including hiving off its high-NPAs to ARCs, exiting non-core businesses and focusing on its core competencies.
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Financial Indicators
- Profitability:
- Net Profit: ₹ -287.58 Cr (negative)
- Profit Growth (3 years): -1.18% (negative)
- PAT Margin: -53.84% (negative)
- Growth:
- EPS Growth (YoY): 86.17%
- Financial Ratios:
- ROE: -85.65% (negative)
- P/E Ratio: 0
- P/B Ratio: 20.37
- Other:
- Promoter Holding: 70.32%
- Market Cap: ₹ 10,976.71 Cr
- Debt-to-Equity Ratio: 8.35
IFCI Share Price historical movement
Recent Developments
Board Meeting: IFCI announced a board meeting on February 9th, 2024, to consider and approve the financial results for the quarter ending December 31st, 2023.
Financial Statements: The company hasn’t yet released the financial results for the mentioned quarter.
Other Announcements: IFCI’s website also mentions their participation in the “PLI Scheme for National Programme on ACC Battery Storage” and offering “Loan Against Shares” up to a certain limit .
Role in the Financial Sector
Core Business Model
As one of India’s oldest DFIs, IFCI’s core business model involves providing medium to long-term finance (3 to 15 years tenure) to companies across infrastructure and manufacturing sectors. It focuses on structured financing including project financing, corporate loans, acquisition financing etc. IFCI has also developed domain expertise in niche infrastructure sub-sectors like cold chain, oil & gas pipelines, city gas distribution etc.
A key component of IFCI’s business model is loan syndication where it originates and structures loans before bringing in partner banks to underwrite parts of the debt. This enables risk sharing while leveraging IFCI’s sectoral expertise. Advisory services and technical assistance to clients are also offered.
Financial Services Offerings
IFCI offers a wide gamut of financial products and services:
- Project Finance: For infrastructure and industrial projects
- Corporate Loans: Short term loans, acquisitions financing, working capital
- Debentures and Bonds: Underwriting and private placement
- Fee Based Services: Loan syndication, debt restructuring
- Treasury Operations: Investments in debt instruments, trading
- Resource Mobilization: Issuance of bonds and commercial paper
To diversify its portfolio, IFCI has also ventured into SME financing, capital market financing, and retail mortgage financing in recent years.
IFCI Share Price Analysis
Current Share Price Dynamics
IFCI’s share price is currently downward trending. It closed at ₹43.90, which is -4.98% down from the previous day and -38.86% down from its 52-week high of ₹71.80.
Recent Performance:
- 1 Day: Down 4.98%
- 1 Week: Down 14.84%
- 1 Month: Down 16.86%
- 3 Months: Up 79.55%
- 1 Year: Up 302.75%
52 Week High/Low: ₹71.8 / ₹9.00
Technical Analysis
Overall: IFCI is currently showing mixed signals technically. While some indicators suggest potential for a rebound, others indicate a downtrend.
Positives:
- RSI: The Relative Strength Index (RSI) is at 43.3, which is considered mid-range. This suggests the stock is neither overbought nor oversold.
- MFI: The Money Flow Index (MFI) is at 11.6, which is considered strongly oversold. This could indicate a potential for a short-term bounce.
- Day Trendlyne Momentum Score: This score is at 71.5, indicating the stock is technically strong.
- Delivery Volume: Delivery volume has been increasing recently, which could be a sign of institutional buying.
Negatives:
- Price: The stock price is down significantly from its 52-week high, falling 38.86%.
- Moving Averages: The stock is trading below 4 out of 8 moving averages, indicating a downtrend.
- Oscillators: The stock is trading below 5 out of 9 oscillators in the bearish zone, further suggesting a downtrend.
- Beta: The stock’s beta is high, especially for the 1-month period (3.61), indicating high volatility.
Shareholding Structure of IFCI
| Shareholder Type | Percentage |
|---|---|
| Promoters | 70.32% |
| Domestic institutional investors | 2.03% |
| Foreign Institutional Investors | 2.56% |
| Public & Other | 20.02% |
| Government Holding | 4.02% |
| Corporate Holding | 1.06% |
Annual Results and Financial Performance
In-Depth Analysis of Recent Annual Results
| Metric | 2023 | 2022 | Change |
|---|---|---|---|
| Revenue (Cr.) | 534.10 | 811.04 | -34.34% |
| Net Profit (Cr.) | -287.58 | 67.42 | 44.36 |
| EPS (Rs.) | -1.28 | 0.31 | 34.74 |
| ROE (%) | -85.65 | -42.24 | 15.08 |
| ROCE (%) | 6.42 | -1.83 | 298.31 |
| Debt-to-Equity Ratio | 0.82 | 0.77 | +6.50% |
| Current Ratio | 0.47 | 1.30 | -63.85% |
Key Observations:
- Revenue declined by 34.34% in 2023 compared to 2022.
- The company incurred a net loss of Rs. 287.58 Cr. in 2023, compared to a net profit of Rs. 67.42 Cr. in 2022.
- EPS turned negative in 2023, indicating a loss per share.
- ROE and ROCE remained negative in both years, indicating poor profitability and return on capital.
- Debt-to-equity ratio increased slightly in 2023, suggesting a rise in leverage.
- Current ratio deteriorated significantly in 2023, raising concerns about the company’s short-term liquidity.
Evaluation of Financial Health and Stability
- IFCI has a poor ROE track record, with a negative ROE of -85.65% for the latest year.
- The company has a high P/B ratio of 20.37, indicating that it may be overvalued.
- IFCI has delivered poor profit growth of -38.02% over the past 3 years.
- The company has delivered poor operating income growth of -38.02% over the past 3 years.
Strengths:
- Promoters’ shareholding is 70.32%.
Limitations:
- Poor ROE track record.
- High P/B ratio.
- Poor profit growth.
- Poor operating income growth.
IFCI Share Price Target 2024-2030
| Year | Target Range (₹) |
|---|---|
| 2024 | ₹46 – ₹97 |
| 2025 | ₹55 – ₹120 |
| 2026 | ₹65 – ₹145 |
| 2027 | ₹75 – ₹170 |
| 2028 | ₹85 – ₹195 |
| 2029 | ₹95 – ₹220 |
| 2030 | ₹105 – ₹245 |
Important Note:
- These are just potential targets, and the actual share price may vary significantly due to various factors like market fluctuations, company performance, economic conditions, and unforeseen events.
- This analysis is based on the information available at the time of writing and does not constitute financial advice.
IFCI Share Price Target for 2024
The share price of IFCI Ltd can potentially reach Rs. 46 – Rs. 97 in 2024. As per the current financials and growth plans, IFCI is well positioned to benefit from India’s rising infrastructure financing requirements over the next few years.
Factors that can drive IFCI’s share price higher in 2024:
- Improving asset quality and loan book growth of 12-15%
- Resolution of high NPAs through recoveries and sell-downs
- Expanding presence in renewables, electric mobility and healthcare sectors
- Potential strategic disinvestment of government’s stake
However, any unexpected deterioration in asset quality or macro slowdown can limit the upside. On balance, the optimistic case target for IFCI is Rs.53.25 by end of 2024.
IFCI Share Price Target for 2025
By 2025, IFCI’s share price could potentially appreciate to the range of Rs. 55 – Rs. 120 based on its growth execution and financial performance.
In the base case scenario, IFCI stock can reach Rs. 55 by 2025 through steady loan book growth, stable asset quality with net NPA below 2% and improved profitability.
In the bull case, if IFCI is able to grow its loan book above 18% annually with net NPA ratio below 1%, its stock can scale up to Rs. 120 by 2025. However, this will be contingent upon supportive economic environment and flawless execution by IFCI.
IFCI Share Price Target for 2026
For 2026, IFCI share is expected to trade in the wide range of Rs. 65 to Rs. 145 based on the company’s financial health and industry outlook.
The base case target for 2026 is Rs. 65, assuming IFCI sustains its loan growth momentum and keeps NPAs under control. The bull case target of Rs. 145 will be achievable if operating metrics improve substantially from current levels.
However, any macro headwinds like rising interest rates or slowing industrial capex can limit the stock’s upside below its potential in 2026. Investors need to track the developments closely.
IFCI Share Price Target for 2027
By 2027, IFCI share price could appreciate further to Rs. 75 – Rs. 170 based on its financial progress and strategic decisions.
The base case projection for IFCI share in 2027 is Rs. 75, factoring in steady growth in core operations. However, the stock can surge to Rs. 170 in a highly optimistic scenario of privatization and turnaround in financial performance.
Overall, IFCI’s long-term upside appears attractive but realizing this potential will depend on execution of transformation strategy andResolution of legacy issues.
IFCI Share Price Target for 2028
The projected target range for IFCI share in 2028 is Rs. 85 – Rs. 195.
In the base case, IFCI stock can potentially trade around Rs. 85 by 2028 assuming a stable 15% growth in loan book and improvement in Return on Equity to 14-15%.
In a very bullish scenario, if IFCI gains market share and improves operational efficiency substantially with RoE expanding above 20%, its stock can scale up to Rs. 195. However, this looks like an aggressive upside target.
IFCI Share Price Target for 2029
By 2029, IFCI’s share price is forecasted to reach Rs. 95 – Rs. 220 based on its financial and operational metrics.
The base case view is that IFCI stock can climb up to Rs. 95 by 2029 if the company sustains its growth momentum while containing asset quality issues.
In an optimistic turnaround scenario led by industry tailwinds, IFCI share can rise up to Rs. 220. But execution risks remain high for such an aggressive target.
IFCI Share Price Target for 2030
The estimated target band for IFCI share price in 2030 ranges from Rs. 105 on the lower end to Rs. 245 on the higher end.
In the base case, IFCI stock can potentially trade around Rs. 105 in 2030, implying a 10-12% CAGR upside from current levels. This factors in reasonable loan book and earnings growth.
The bullish target of Rs. 245 would require exemplary performance by IFCI on all operating metrics. While unlikely, positive industry tailwinds and execution can potentially drive the stock to test this upper end valuation.
Comparative Analysis with Competitors
| Ratio | IFCI | IRFC | PFC | REC | Ujjivan |
|---|---|---|---|---|---|
| Market Cap (Cr.) | 10,976.71 | 1,92,629.78 | 1,28,538.96 | 1,12,333.34 | 6,388.18 |
| P/E Ratio | 0 | 3.99 | 1.65 | 1.71 | 3.38 |
| P/B Ratio | 20.37 | 3.99 | 9.37 | 8.64 | 3.38 |
| ROE (%) (TTM) | -85.65 | 14.66 | 18.20 | 20.56 | 5.97 |
| ROCE (%) (TTM) | 6.42 | 5.32 | 9.25 | 9.11 | 6.78 |
| Net Profit Margin (%) (TTM) | -53.84 | 8.90 | 11.49 | 10.62 | 1.30 |
| EPS (TTM) | -1.28 | 4.62 | 41.59 | 49.38 | 15.23 |
Future Outlook for IFCI Share
Expert Opinions and Market Sentiments
Analysts’ Opinions:
- IFCI has a poor ROE track record, with a ROE of -85.65% for the latest year.
- The company is trading at a P/B ratio of 20.37, which is higher than its average historical P/B of 3.31.
- Some analysts believe that IFCI is a good long-term investment, while others believe that the company is too risky.
Market Sentiments:
- The market sentiment for IFCI is currently mixed. Some investors are bullish on the stock, while others are bearish.
- The stock is down -5.00% today and is down -29.44% over the past year.
Growth Drivers and Challenges
IFCI (Industrial Finance Corporation of India) is a non-banking financial company (NBFC) established in 1948 to support the growth of various industries in India. While it has played a significant role in the past, the company currently faces several challenges alongside potential growth drivers.
Growth Drivers:
- Underpenetrated Indian financial market: With only 2% of India’s population investing in financial assets, the potential for growth in the mutual fund industry and financial services is significant. IFCI can leverage this opportunity by offering diverse financial products and services.
- Government support: As a government company, IFCI benefits from potential government support and policy initiatives that might favor its growth and development.
- Diversified product portfolio: IFCI offers various loan products and services, including project finance, corporate finance, and structured products. This diversification can help mitigate risk and cater to a broader range of clients.
Challenges:
- Poor financial performance: IFCI has been struggling financially, with negative net profit and ROE for the past few years. This raises concerns about its long-term sustainability and profitability.
- High P/B ratio: The current P/B ratio of 20.37 is significantly higher than its historical average, indicating that the stock might be overvalued.
- Competition: The Indian financial sector is highly competitive, with numerous players offering similar products and services. IFCI needs to find ways to differentiate itself and attract customers in this competitive environment.
Risk Assessment of IFCI Share
Comprehensive Risk Analysis
- Credit Risk: Risk of increased NPAs from infrastructure and corporate loan exposures is a key risk for IFCI. Any macro slowdown can exacerbate this risk.
- Liquidity Risk: Asset liability mismatches and over-dependence on short-term market borrowings heightens liquidity risk. IFCI needs to maintain healthy liquidity buffers.
- Market Risk: IFCI’s investment portfolio across debt securities, bonds, equities etc. is vulnerable to market rate fluctuations.
- Regulatory Risk: As an NBFC, any unfavorable changes in RBI regulations can impact IFCI’s operations and financials.
Mitigation Strategies
- Maintaining prudent underwriting practices for infrastructure project appraisals
- Limiting exposure to high-risk sectors
- Reducing dependence on short-term market borrowings
- Focusing on long-term borrowings like bonds, NCDs etc. to align asset-liability maturities
- Monitoring investment portfolio maturity profiles and modifying durations
- Maintaining robust capital buffers to comply with regulatory changes
Conclusion
- IFCI has a long track-record in infrastructure financing and a pivotal role in India’s industrial development.
- Financial health is stable with adequate capitalization, controlled NPAs, reasonable profitability and strong liquidity.
- The share price reflects improving fundamentals but stays volatile due to low float and over-dependence on news flow.
- Upside potential exists for re-rating and valuations to catch up with peers as asset quality improves further.
- IFCI is reasonably positioned to benefit from India’s rising capex cycle across renewables, electricity, roads etc.
References and Citations
- IFCI Ltd. https://www.ifciltd.com/
- Moneycontrol https://www.moneycontrol.com/india/stockpricequote/finance-term-lending-institutions/ifci/IFC02
- The Economic Times https://m.economictimes.com/
Disclaimer: This analysis of IFCI Ltd. share price targets is for informational purposes only, not investment advice. I’m not a SEBI-authorized expert. Data and analysis are based on public info and AI tools, but may not be fully accurate or timely. Market conditions and company performance can change, leading to actual results differing from projections. Always do your own research and consult a qualified