IRCTC plummets 32% from record high after rallying nearly 300% in 6 months

IRCTC plummets 32% from record high after rallying nearly 300% in 6 months

Shares of Indian Railway Catering and Tourism Corporation (IRCTC) slipped 18 per cent to Rs 4,371 on the BSE in Wednesday’s intra-day trade, amid heavy volumes, falling over 30 per cent in the past two trading days on account of profit booking.

The stock of the state-owned travel support services tanked 32 per cent from its record high level of Rs 6,393 touched in Tuesday’s intra-day trade amid buzz that the government is appointing a regulator for the rail sector. A sharp decline in stock price has seen the investors lose around Rs 32,352 crore wealth in the past two days. The market capitalisation (market cap) of IRCTC declined to Rs 69,936 crore in intra-day trade today. Its m-cap had touched Rs 1.02 trillion in intra-day trade on Tuesday.

In the past six months, the market price of IRCTC has appreciated by nearly 300 per cent from the level of Rs 1,612, as compared to a 30 per cent rally in the S&P BSE Sensex during the same period till yesterday.

At 10:00 am, IRCTC was down 13 per cent at Rs 4,685 on the BSE, as against a 0.01 per cent decline in the benchmark index. A combined 6.2 million equity shares have changed hands on the NSE and BSE so far in trade.

Further, IRCTC shares will turn ex-date for stock split in the ratio of 1:5 on October 28, 2021. IRCTC has fixed October 29, 2021, as the record date to ascertain the name of shareholders entitled for subdivision/split of equity shares of Rs 10 each into five (5) equity shares of the face value of Rs 2 each. The board of IRCTC approved a stock split in the ratio of 1:5 on August 12.

A stock split is generally done to make the stock more affordable for small retail investors and increase liquidity. It refers to splitting the face value of the shares of companies, wherein the number of shares of the company increases but the market cap remains the same. Existing shares split, but the underlying value remains the same. As the number of shares increases, the price per share goes down.

IRCTC is the only entity authorised by the Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India.