IFCI Surges 30%: Is the NSE IPO Value Unlocking Real?

On 19 January, IFCI (Industrial Finance Corporation of India), a Non-Banking Financial Company (NBFC), witnessed a sharp upward move in its shares as they jumped as much as 4.6% to hit ₹63.48 per share.

The IFCI stock accumulated gains of close to 30% over the past five trading sessions alone.

The stock has delivered a steady 11% return over the past year. However, its longer-term performance has been far more explosive. It has registered a surge of more than 365% over the last three years. It is said that the recent share price hike is due to the proposed Initial Public Offering (IPO) of the National Stock Exchange (NSE). The question is whether this IPO-led rally is genuine, or whether IFCI's valuation is the main driver of investor sentiment?

How is IFCI linked to the NSE IPO?

The connection between IFCI’s share performance and the NSE IPO is in a layered holding structure. Market participants refer to it as a "holding company discount" or "sum-of-parts."

IFCI does not hold a direct stake in the exchange. However, it holds a controlling 52% stake in the Stock Holding Corporation of India (SHCIL). SHCIL, in turn, owns a 4.4% stake in the NSE (as in the December quarter). This structure gives IFCI an effective, indirect stake of around 2.35% in NSE.

The valuation math behind this holding has heightened investor interest. IFCI’s effective holding, as the value of its indirect stake is at around ₹13,000 Cr. This figure is huge compared to IFCI’s own market capitalisation of around ₹16,400 Cr.

If the exchange were to achieve a significantly higher valuation upon listing, this investment could cover a large portion of IFCI’s market value.

From a valuation perspective, IFCI is currently trading at a Price-to-Earnings (P/E) ratio of 43.07 and a Price-to-Book (P/B) ratio of 1.08, reflecting the premium the market is assigning to its strategic investments.

The Price-to-Sales (P/S) ratio is at 6.19 (Economic times), but the market is seemingly looking beyond core operations to the underlying asset value. The excitement is coming from recent comments by regulatory officials at the Samvad 2026 event. It was suggested that the long-pending No-Objection Certificate (NOC) for the exchange's listing could be granted in January.

This potential for "value unlocking" has made the stock highly responsive to any news regarding the NSE's public debut. But why is this regulatory green light important?

The Regulatory Green Light

The surge in IFCI's share price was immediately driven by a statement from SEBI officials indicating that a resolution to the regulatory hurdle (the absence of an NOC) blocking the IPO is in the offing.

Regulators noted that they have agreed "in principle" to a settlement. This is generally seen as the final condition for granting the NOC.

With the issuance of this certificate, the exchange can begin formal listing steps. This includes filing its DRHP (Draft Red Herring Prospectus).

However, despite the optimism, the timeline for the actual listing is still unclear. There is a gap between the immediate regulatory approval and the actual listing date. It has created a period of anticipation where news flow will likely continue to drive volatility. With a confirmed timeline still months away, is the market pricing in the event too early?

The case of the other stakeholders

IFCI is not the only listed entity with a vested interest in the exchange's debut. However, it is currently the most sensitive to the news due to its smaller size relative to the stake value.

Other major financial institutions also hold significant portions of the exchange.

• The LIC (Life Insurance Corporation of India) holds a 10.72% stake
• The GIC (General Insurance Corporation of India) holds 1.64%
• The New India Assurance Company holds 1.42% (Moneycontrol)

For IFCI, the value of the NSE stake is disproportionately large compared to its core business metrics. This makes IFCI a "high-beta" play on the IPO news.

What Should Investors Consider?

There is a prospect that the National Stock Exchange will finally go public after years of regulatory delays. Shareholders are awaiting the final valuations and the timeline for the public offer. For IFCI, investors need to remember that the surge in its share price is due to an indirect benefit.

Source

Moneycontrol

Economic times