IFCI Board Approved the Merger of a Group of Companies, Resulting in a 15% Stock Jump

IFCI has encountered increasing pressures since it was directed to stop new lending in the fiscal year 2021-22. This decision was triggered by a concerning increase in non-performing assets (NPAs), which significantly eroded the lender’s capital reserves. As the Indian government owns approximately 72% of IFCI, this restructuring aligns with wider economic strategies designed to stabilize financial institutions while also improving infrastructure development throughout the country.

IFCI Stock Rises More Than 15% on November 25th

The stock price of IFCI Ltd. surged by more than 15% following the board’s approval for the merger and consolidation of multiple entities within its group. This initiative is designed to simplify operations and improve efficiency.

The board’s approval, which was verified in a meeting on November 22, follows the preliminary endorsement from the Department of Financial Services, Ministry of Finance. The consolidation strategy includes merging StockHolding Corp. of India, IFCI Factors Ltd., VFCI Infrastructure Development Ltd., and IIDL Realtors Ltd. into IFCI Ltd.—the publicly listed company.

Merger of All Companies in One Entity for IFCI

Additionally, several subsidiary companies, such as StockHolding Services Ltd., IFCI Financial Services Ltd., IFIN Commodities Ltd., and IFIN Credit Ltd., are poised to merge into a single entity. This new organization will operate as a direct subsidiary of the consolidated IFCI entity. Other companies within the group, including StockHolding Document Management Services Ltd. and IFCI Venture Capital Funds Ltd., will remain direct subsidiaries of the newly consolidated entity.

The Department of Financial Services (DFS) has instructed IFCI to proceed with the consolidation process in accordance with relevant laws and regulations. The approval of this merger is considered a significant move for IFCI, as it aims to enhance its business operations and foster greater synergies among its group companies.

IFCI Ltd Stock Returned More Than 150% in a Year

IFCI Ltd.’s stock is currently trading at Rs. 64.27 per share, up 1% intraday today. On Monday, the stock rose by up to 15.2% to Rs 66.79 per share. In the last 12 months, the stock has risen by 158.2%.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.