Shares of the Indian Railways' online ticketing, tourism and catering arm - Indian Railway Catering And Tourism Corporation (IRCTC) - rallied as much as 19.10 per cent to hit an intraday high of Rs 983.60, in an otherwise weak market, after the stock started trading ex-split. Starting Thursday, IRCTC shares were split in the ratio of 1:5, sub-dividing the face value of share from Rs 10 per share to Rs 2 per share. IRCTC board had announced the plan to split the stock on August 12.
The decision on stock split was approved by the Ministry of Railways and it took more than two months to complete the process of stock split.
A company's authorised share capital remains the same in a stock-split, but the market price declines in proportion to the split ratio and this results in a greater number of shares available in the secondary market. The reduction of the market price and increase in liquidity makes the shares affordable to retail buyers.
IRCTC shares staged a one-way up move after the company announced its decision to split the stock. The stock rallied a whopping 148 per cent to hit record high of Rs 6,393 on October 19 ahead of split.
As of 12:16 pm, IRCTC shares traded 17 per cent higher at Rs 966, outperforming the Sensex which was down 1 per cent.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
