IRFC Share Price Spikes After Receiving 'Navratna' Status

Share price of Indian Railway Finance Corp. jumped over 3% on Tuesday after the company was granted 'Navratna' status by the government.

On Monday, the government upgraded IRFC to a 'Navratna' central public sector enterprise, alongside Indian Railway Catering and Tourism Corp. IRCTC is the 25th Navratna, while IRFC is the 26th.

IRFC, which operates under the Ministry of Railways, reported a turnover of Rs 26,644 crore, a net profit of Rs 6,412 crore, and a net worth of Rs 49,178 crore for financial year 2024, Department of Public Enterprises said in a post on X.

A 'Navratna' status is awarded to CPSEs that meet specific financial and operational criteria, granting them greater autonomy in investment and decision-making. 'Navratna' companies can invest up to Rs 1,000 crore, or 15% of their net worth, on a single project without government approval, with an overall investment cap of 30% of net worth in a financial year.

With this upgrade, IRCTC and IRFC now join a group of other 'Navratna' CPSEs, including Bharat Electronics Ltd., Container Corp. of India, Hindustan Aeronautics Ltd., and Oil India Ltd., among others.

Shares of IRFC rose as much as 3.71% to Rs 115.25 apiece. They pared gains to trade 3.56% higher at Rs 115.09 apiece, as of 10:00 a.m. This compares to a 0.18% decline in the NSE Nifty 50.

The stock has fallen 21.09% in the last 12 months. Total traded volume so far in the day stood at 0.79 times its 30-day average. The relative strength index was at 32.09.

The one analyst tracking the company maintains a 'sell' rating, according to Bloomberg data. The average 12-month analysts' consensus price target implies a downside of 56.3%.