IRB Infrastructure Plunges 10% in Massive Block Deal! Buy Now or Forever Hold Your Peace?
IRB Infrastructure shares tumbled 10% after a huge block deal by Cintra, a major shareholder. Cintra likely sold 5% of its stake, causing the stock price to fall to Rs 63. Despite the drop, analysts remain optimistic about IRB’s future due to project growth and potential interest rate cuts.
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IRB Infrastructure dives on big block sale
IRB Infrastructure Plunges 10% in Massive Block Deal
IRB Infrastructure Developers Ltd witnessed a significant decline in its shares during early trading on Tuesday, plummeting by over 10% due to a substantial block deal with high trading volume. Reports indicated that Cintra, a toll road subsidiary of the Dutch conglomerate Ferrovial, possibly sold off approximately 5% of its stake in the civil construction firm. Trading on the National Stock Exchange (NSE) saw nearly 42 crore shares exchanged. The stock reached a low of Rs 63 on the NSE, reflecting a decline of 10.20%. By 10:30 am, the stock was trading at Rs 64.95, down by 7.43%.
IRB Infrastructure falls, block deals hit
On Monday, IRB Infrastructure’s shares had experienced a decline of 9.05%, closing at Rs 70.15. According to The Economic Times, Cintra, operating under CINTRA INR INVESTMENTS B V, aimed to generate approximately Rs 1,900.29 crore from the transaction, as indicated in a term sheet review. Cintra previously held a 24.86% stake in IRB Infrastructure as of March 31, according to BSE filings.
This recent transaction marks the second block deal involving IRB Infrastructure within the past 15 days. Earlier, on May 30, 2024, IRB promoters had sold 4% of their stake in the company through another block deal, as reported by ET.
IRB dips, positive outlook maintained
As per the ET report, Cintra put up 30.10 crore shares for sale at a floor price ranging from Rs 63 to Rs 70.16 per share, representing a 10% discount from Monday’s closing price at the lower end of the range. Jefferies and HSBC are reportedly handling the deal as bankers.
Cintra initially acquired a 24.86% stake in IRB Infrastructure Developers in December 2021. Despite the recent decline in stock price, IRB Infrastructure remains positive about its future prospects. HDFC Institutional Equities maintains its ‘add’ rating on the stock, expressing optimism about improved growth and margins due to a favorable mix.
They have adjusted their EPS estimates upwards and increased their SOTP-based target price to Rs 72 per share, citing factors like improving ordering outlook, better-than-expected toll growth, and potential interest rate cuts. Given the limited upside on current market price, they continue to recommend adding the stock to portfolios.
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