IRCTC back in the green after dipping from Oct 19 peak

Amid volatility in the global markets, the BSE Sensex on Tuesday closed 195 points lower at 57,064 while the Nifty 50 closed at 16,983, shedding 70 points. The India volatility index, VIX, closed over the 21 levels.

Meanwhile, the shares of the Indian Railway Catering and Tourism Corporation (IRCTC) recovered on Tuesday and in early trade on Wednesday, following the market crash on Friday, when both the benchmark indices plunged by more than 2.9 percent over concerns of a new variant.

Reports suggest that the IRCTC stock has seen a correction of over 10 percent in the last five days. On Monday, the IRCTC stock had closed 5.8 percent lower, while on Tuesday, in early trade, the shares rebounded and went up nearly six percent, as per news reports. The stock has been in the green in the early hours of trade on Wednesday, December 1, led by the benchmark indices recovering.

The Indian Railways catering and ticketing subsidiary IRCTC and online bus ticketing platform RedBus have reportedly joined hands to launch a rail ticket booking service. Following this collaboration, users of Redbus services will be able to book rail tickets on the platform.

Shares of the tourism corporation had lost more than 30 percent following the October 19th high of the markets as of November 26, according to data.

When IRCTC saw a peak

Earlier, in August 2021, the tourism corporation had announced a stock split that would divide each stock into five shares, which was a move aimed at boosting stock liquidity and affordability for small investors. The company had announced this move when it reported its first-quarter earnings. The corporation reported a net profit of over Rs 82 crore for the April to June quarter, as compared to the net loss of over Rs 24 crore in the same quarter a year ago.

The e-ticketing and catering group of the Indian Railways saw its stock rise ever since the stock split announcement. Further, the PSU stock experienced a rally following the uptick in vaccinations, the opening up of the economy, and low case counts of Covid-19 ever since the peak of the second wave in May 2021. In September, the IRCTC market cap breached the Rs 50,000-crore level for the first time. Another factor attributed to the rise of the PSU stock was the festive season when special trains were announced. All these led to the stock hitting a high on October 19. The IRCTC stock, as per news reports, had gained over 300 percent from the start of the calendar year till October 19, 2021. The IRCTC market cap touched Rs 1 trillion as its stock soared on that day.

MSCI India review

As part of the half-yearly review of MSCI, the index service provider, IRCTC was added to the standard index with effect from November 30, along with six other stocks. Reportedly, the upgrade of the stock from small-cap to mid-cap during the review meant that the stock would have received inflows of over $100 million in the last 30 minutes of trade on November 30.

The Indian Railways subsidiary made its stock market debut on October 14, 2019, ending its first day over 128 percent against its issue price. The IRCTC IPO was part of the government’s disinvestment plans for the fiscal when it had a target of Rs 1.05 lakh crore for FY2020. The disinvestment target for the current fiscal is Rs 1.75 lakh crore, with the state-run life insurer LIC’s IPO slated for the calendar year 2022.

Conclusion

The IRCTC stock has seen a roller coaster ride ever since the beginning of the calendar year; with highs and lows. After gaining over 300 percent since early 2021, the stock hit a peak on October 19. Ever since it has seen a dip of 30 percent, and has managed to be back in the green in early trade on December 1.

FAQs

When did IRCTC make its stock market debut?

IRCTC made its market debut on October 14, 2019.

What does a stock split mean?

A stock split involves splitting existing shares into its multiples. For instance, a 1:5 stock split would mean that one equity share of a company would be split into five such shares. It is aimed at enhancing liquidity and affordability for small investors.

When did IRCTC touch the Rs 1 trillion market cap?

The IRCTC market cap touched the Rs 1-trillion level on October 19, 2021, two years after it made its stock market debut.