IRFC, RVNL, Railtel and other rail stocks fall up to 20% amidst broader market pain

Railway stocks like IRFC Ltd., RVNL, IRCON International Ltd., which gained between 200% to 300% through 2023 are also witnessing a sharp correction in Wednesday's trading session in-line with the sell-off witnessed in the broader markets.

Shares of IRFC are down 9%, marking their biggest single-day drop since December 2022. The stock has corrected 35% from its peak of ₹192 it made earlier this year.

Railtel's shares are also down 20% in today's trading session, which is the biggest single-day drop the stock has seen since its IPO in 2021.

RVNL also received a work order worth ₹106 crore in today's session. Over the last few days, it has been awarded orders worth over ₹2,000 crore starting the extended weekend.

Shares of other railway companies are also trading with losses of 5% to 10%.

Barring IRCTC, all of above highlighted names have corrected between 35% to 40% from their recent peaks. IRFC is down nearly 40%, as is Railtel.

It must be noted that stocks like IRFC have very little free float in the market. The government still holds over 86% stake in IRFC.

Nilesh Shah of Kotak Mahindra AMC told CNBC-TV18 that he expects the correction to persist for a bit longer in stocks with low free float.

"As far as railways are concerned, the story is pretty much the same. If somebody picks up rail related companies there is absolutely no way they can go wrong with the kind of work which is happening in Indian railways currently. So whether it's a wagon manufacturing companies or the financing companies in the railway side, I think after some more correction, there will be decent bets for long term," Sudip Bandopadhyay of Inditrade Capital said.