Shares of the Indian Railways’ catering, tourism, and online ticketing arm – Indian Railways Catering and Tourism Corporation (IRCTC) staged a strong recovery after the Ministry of Railways withdrew the IRCTC convenience fee-sharing decision. Secretary, Department of Investment and Public Asset Management tweeted, Ministry of Railways has decided to withdraw the decision on IRCTC convenience fee. The decision was reversed within 19 hours after the massive fall in stock price.
Earlier in the day, IRCTC shares plunged as much as 29 percent to hit an intraday low of ₹ 650.10 on the BSE after the company informed exchanges on Thursday that the Ministry of Railway asked it to share half of all the convenience fee revenue it earns.
However, post the clarification from the government IRCTC stock staged a recovery of 39 percent to hit an intraday high of ₹ 906.
IRCTC had collected around ₹ 300 crores as ‘convenience fee’ in the financial year 2020-21. Railway Ministry wanted IRCTC to share 50 percent of this amount, which comes to ₹ 150 crores. For the last five years, IRCTC has been collecting and utilizing all funds collected as a convenience fee to run its operations, sources told NDTV.
The state-owned IRCTC is the only firm authorized to manage food services on trains and has a monopoly in the online ticketing and catering services for the Indian Railways.
In the previous session, IRCTC shares jumped 20 percent after it started trading ex-stock split. Starting Thursday, IRCTC shares were split in the ratio of 1:5, sub-dividing the face value of share from ₹ 10 per share to ₹ 2 per share. IRCTC board had announced the plan to split the stock on August 12.
