IRB Infra shares crash after 10:1 stock split-triggered rally; what should investors do?

IRB Infra Share Price: Shares of highways infrastructure developer IRB Infrastructure Developers crashed 14 per cent a day after hitting a fresh 52-week high after a 10:1 split. The counter opened at Rs 31.85 on NSE, down 10 per cent from the previous close of Rs 34.05. It quoted at Rs 29.60 around 1 PM. 

The shares of the Mumbai-based company traded ex-split yesterday and touched an adjusted 52-week high of Rs 34.90. It has gained 19 per cent in the last two sessions. The new face value of each share of IRB Infra after the split is Re 1. 

"The rationale behind the stock split is to enhance the liquidity in the capital market, to widen shareholder base and to make the shares more affordable to small investors," the company said.

Meanwhile, Zee Business panellist and market expert Sumeet Bagadia recommended buying the shares of the company for a target of Rs 36.

Domestic brokerage firm Motilal Oswal said that IRB’s order book is strong at Rs 191 billion. It received the appointed date for the Ganga Expressway project during 3QFY23. As some of these large projects move into execution, "we expect EPC growth to improve going ahead". 

Anand Rathi said that the management, citing healthy prospects, is sanguine of adding to keep growing. The toll division continues to benefit from rising traffic and periodic rate-revisions. On the reassuring outlook, "we retain Hold rating on asset sale and raised estimates".

The company in the October-December quarter reported a whopping 94 per cent increase in its net profit at Rs 141.35 crore from Rs 72.68 crore in the corresponding quarter last fiscal. Its total toll collection in January also jumped 36 per cent to Rs 374.81 crores as against Rs 276.44 crores in January 2022.

In another related development, the company has been selected as the preferred bidder for the Rs 2,132 crore build-operate-transfer (BOT) project in Gujarat. The project with a concession period of 20 years is 6 laning of the 90.90 kms stretch between Samakhiyali to Santalpur.

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