A previously predicted downturn for Indian Railway Finance Corporation Ltd. (IRFC) shares has materialized, with the stock falling sharply from around 120.13 to the 89 level. This drop places it firmly in bearish territory after falling below its 200-day Simple Moving Average around 121. Market observers now suggest the stock could potentially decline further to the 60-65 range, citing a government disinvestment creating a supply overhang and a high historical valuation that may normalize.
Shares of Indian Railway Finance Corporation Ltd. (IRFC) have entered bearish territory, reaching the 89 level after a forecast anticipating a drop to 90-92 proved accurate. The railway stock was previously trading around the 120.13 range.
The stock is now trading below its 200-day Simple Moving Average, which sits around the 121 level. This signals a breach of the long-term structural shift as the charts have formed the death cross.
A further prediction indicates IRFC shares could fall to the 60-65 level next, as the stock is currently trading below its 200-day Simple Moving Average (SMA). The reasoning notes that when momentum stocks lose this key support, they often revert to older, pre-rally consolidation zones.
The Indian government, which owns an 86% stake, announced a 4% reduction early this year. This disinvestment through an Offer for Sale has created a supply overhang for the railway stock.
More shares will be circulated in the market, potentially leading to oversupply. Following the Union budget’s passage, IRFC shares now depend more on event-based buying.
During its peak, the stock traded at a high Price-to-Book ratio for a railway-financing company. A drop to 60–65 would bring its valuation back in line with its historical averages.
