IFCI, NIACL stocks jump up to 14%; NSE IPO buzz lifts focus: Analysts share outlook

Shares of state-owned IFCI Ltd and The New India Assurance Company Ltd (NIACL) witnessed strong buying interest in Wednesday's trading session, with both stocks gaining sharply amid focus on their exposure to the National Stock Exchange (NSE) and the proposed initial public offering (IPO) of the exchange.

IFCI shares surged 13.92 per cent to hit a 52-week high of Rs 99.45. The stock was last trading 11.40 per cent higher at Rs 97.25. With Wednesday's gains, IFCI has risen 72.34 per cent over the past six months.

NIACL shares, meanwhile, climbed 8.29 per cent to touch a day's high of Rs 201.25. The stock was last quoted 6.70 per cent higher at Rs 198.30, taking its six-month gain to 39.16 per cent.

Ravi Singh, Chief Research Officer at Master Capital Services, said the movement in the two stocks was primarily linked to the proposed NSE IPO and the potential value unlocking associated with their holdings in the exchange.

"NSE has already filed its DRHP (Draft Red Herring Prospectus), and the proposed IPO is structured as an offer for sale, making the valuation of its existing shareholders an important trigger for these stocks," Singh said.

According to Singh, NIACL holds a direct 1.42 per cent stake in NSE. IFCI, meanwhile, has an indirect exposure through its 52 per cent holding in Stock Holding Corporation of India Ltd (SHCIL), which owns around 4.4 per cent in NSE.

"This exposure has led the market to revalue both counters as investors anticipate value unlocking from the NSE listing," Singh said.

He added that the NSE IPO would remain an important factor for the two stocks as the issue progresses, while cautioning that the sharp run-up could also result in volatility and profit booking.

"Investors already holding these stocks can continue to hold, while fresh positions should preferably be considered on dips rather than chasing sharp rallies. The NSE IPO remains the key catalyst, and any further progress towards the listing could keep the positive momentum intact," Singh said.

IFCI share price: Technical view

According to AR Ramachandran, Sebi-registered research analyst at Tips2trades, IFCI's stock is "bullish and overbought" on the daily charts.

“IFCI's stock is bullish and overbought on daily charts with next resistance at Rs 98.6. Investors should keep booking profits as a daily close below the support of Rs 88.8 could trigger a fall towards Rs 76.9 in the near term," Ramachandran said.

NIACL share price: Technical view

On NIACL, Ramachandran said the stock remained bullish on the daily charts, with Rs 182.4 acting as a key support level.

"A daily close above the resistance of Rs 200 could lead to an upside target of Rs 218 in the near term," he added.