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Business News/ Markets / Stock Markets/  IRB Infrastructure Developers share price jumps nearly 10% after Kotak upgrades rating to ‘Add’, ups target price
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IRB Infrastructure Developers share price jumps nearly 10% after Kotak upgrades rating to ‘Add’, ups target price

IRB Infrastructure Developers' share price surged 10% after Kotak Institutional Equities upgraded the stock to 'Add' from 'Sell'. The stock is expected to extend its bounce from the strong support of 89EMA, with resistance at 65–68 and support at 52, according to technical analysts.

IRB Infrastructure Developers share price today opened at an intraday low of ₹54.88 and touched an intraday high of ₹59.25. (iStock)Premium
IRB Infrastructure Developers share price today opened at an intraday low of 54.88 and touched an intraday high of 59.25. (iStock)

IRB Infrastructure Developers share price jumped nearly 10% on Thursday's trading session following an upgrade to 'Add' from 'Sell' and an increase in the target price to 65 from 60 by domestic brokerage Kotak Institutional Equities. The increase in the target price was attributed to modifications made to the brokerage's traffic estimate for Private InvIT assets.

"We upgrade IRB Infrastructure Developers to ADD from SELL, after 22% decline since our downgrade to SELL," the brokerage said.

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IRB Infrastructure Developers share price today opened at an intraday low of 54.88 and touched an intraday high of 59.25. Technical analysts witnessed volume-based activity as prices were up more than 7%. This bounce is seen from the strong support of 89EMA and may extend in the coming sessions; 65–68 is the next resistance, whereas 52 is support, said analysts. 

IRB Infrastructure share price jumped by 129.47% over the last year, outperforming the sector as a whole by 55.85%, according to trendlyne data.

Also Read: Gold rate today hits new peak of 66,778 after US Fed meeting. Should you buy in current gold price rally?

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Due to the National Highways Authority of India's (NHAI) emphasis on controlling its debt levels, Kotak Institutional Equities said that the road sector's awarding has changed to built-operate-transfer (BOT) and toll, operate & transfer (TOT) projects. The brokerage believes that firms like IRB, with their robust bank sheet, are best positioned to gain from the 444 billion BOT pipeline for FY2024.

According to the brokerage, IRB Private InvIT has five newly awarded assets (a mix of BOT and TOT) and ten current BOT assets in its portfolio. Through its toll road subsidiary Cintra, Ferrovial has agreed to purchase a 24% stake in IRB Infrastructure Trust (IRB Private InvIT) from GIC for EUR740 million, or around 65.9 billion. A 24% share in ten current BOT assets, valued at 189 billion, is being acquired for 45 billion of the 65.9 billion overall transaction size.

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An additional 20.9 billion is for commitments to equity and equity (24% interest) in five newly awarded projects at book value.

“If we apply a similar 2.5X multiple to these five assets, then total Private InvIT value is 407 billion (IRB’s 51% stake valued at Rs204 bn implying Rs34/share). This compares to our valuation of 144 billion for IRB’s stake in the private InvIT ( 24/share). We value IRB’s stake in existing 10 assets at 69 billion and 75 billion for the five new assets," said the brokerage in its report. 

Also Read: Muthoot Finance, Manappuram shares rally on spike in gold prices

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 21 Mar 2024, 11:15 AM IST
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