Post removal of CMD Amitabh Banerjee due to issues already discussed on thread quarterly investor earnings call have stopped so there is less clarity. Also no annual borrowing target was declared in budget as government in budgetary allocation has increased budget substantially also there is a gearing issue. Expected OFS of Government stake (86.36%) overhang is also there.
It is getting priced like old PSUs but given cost plus model offers low downside risk at CMP of approx 26 rupees. Moreover DIPAM guidelines of 30% of PAT as dividend for all PSUs (which is unfair for business but government has not given special consideration to IRFC) which gives visibility of 5 to 6% dividend to investors.
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