IDFC shares on Monday ended at Rs 79.35, up 1.02%.
IDFC is registered with the Reserve Bank of India (RBI) as NBFC – Investments. Besides banking, earlier it had investments in diverse businesses such as asset management and infrastructure debt fund. Now the company has simplified its complex corporate structure and divested all other businesses except banking. The company holds a 100% stake in IDFC Financial Holding Limited and IDFC FHL holds a 40% stake in IDFC First Bank.
Technical View by Sneha Seth, Derivatives Research Analyst at Angel One
“IDFC has been hovering in the range of Rs 75-82 for the last four weeks now. However, after seeing a strong run in the latter half of last calendar year, such consolidation should be considered healthy for any stock.” Seth said.
Level-wise, the strong support is placed around the Rs 72-73 odd zone, whereas any move beyond Rs 81-82 shall bring it towards the Rs 88-89 level, she added.
The stock is off its 52-week high of Rs 92.40 which it hit in February.
Momentum indicators RSI and MFI are trading in a medium range of 49.1 and 54, respectively which indicates a likelihood of further upside. A number below 30 indicates that the stock is trading in an oversold territory while above 70 is indicative of the stock trading in an overbought zone.
The stock has been highly volatile with a one-year beta of 1.48, the Trendlyne data showed.
Fundamental View
Sharekhan on IDFC: Buy | CMP: 79.35 | Upside 15%
Brokerage firm Sharekhan said that a key catalyst for IDFC stock in the near term is the reverse merger with IDFC First Bank and IDFC FHCL, subject to regulatory approvals. “IDFC has completed the entire corporate restructuring and has simplified its complex corporate structure and has investments now only in IDFC Financial Holding Limited (IDFC FHCL – 100%) and in IDFC First Bank – 40%,” the report said.
Sharekhan maintains a buy on IDFC shares noting that there could be an upside risk, driven by a favourable swap ratio announcement. “We have not factored in the potential upside in the valuation part due to uncertainty over the swap ratio. The stock is factoring in an 11% holding company discount at the current price levels,” the report said.
Valuation
ET CONTRIBUTORSKey Risks
– Delay in the reverse merger and unfavourable swap ratio
ET CONTRIBUTORS(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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