IFCI has dropped from Rs 120 levels late 2007 to below Rs 40 now and an expert on NDTV Profit today advised a holder whose cost is Rs 73 to exit the scrip and take the loss as it will not go anywhere from here!
I say No way !…Oh It may fall lower from Rs 39…but the potential is very much alive and I see this stock recovering strongly as we roll into 2009
I first recommended this stock in Dec 2006 at Rs 16 and then several times in early 2007 as it climbed past Rs 30…It was categorised as a SS 3 Scriptech Select Stock (SS 3 stands for Scriptech Sapling reflecting a strong turnaround potential)
Ofcourse IFCI did stand for I F….d the Country of India but then it showed very good prospects in 2006 to turnaround sharply as Value of it’s Investments held in NSE,etc surged sharply..It began showing operating profits and recommenced lending to the corporate sector….The government began the process of finding a suitable strategic Investor for a 26% stake and also invited bids…This process was messed up by the reluctance of the Government to be forthcoming on loan conversions by Institutions and also unwillingness to dilute management control alongwith diluting equity…many serious bidders dropped off and the only bid came from the Sterlite Consortium and that too was conditional and low at Rs 80…Government refused to accept the bid and IFCI reacted sharply from 120 to Rs 60 …a level which seemed justified on improving fundamentals…It’s now dropped sharply below Rs 40…This is not a price to sell…In fact retain the faith and conviction in IFCI …rebidding process has already begun…early days yet…look for buying some more of IFCI at big declines…say at Rs 25 to Rs 27 levels which it may retreat to if Sensex corrects some more yet from current 13300 levels