Railways Ministry Takes A Big Decision, Then Cancels It In 19 Hours
Shares of the Indian Railways' catering, tourism and online ticketing arm - Indian Railways Catering and Tourism Corporation (IRCTC) staged a strong recovery after Ministry of Railways withdrew 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.
Ministry of Railways has decided to withdraw the decision on IRCTC convenience fee pic.twitter.com/HXIRLxXTlL
October 29, 2021Earlier in the day, IRCTC shares plunged as much as 29 per cent to hit an intraday low of Rs 650.10 on the BSE after the company informed exchanges on Thursday that 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 per cent to hit an intraday high of Rs 906.
IRCTC had collected around Rs 300 crore as 'convenience fee' in financial year 2020-21. Railway Ministry wanted IRCTC to share 50 per cent of this amount, which comes to Rs 150 crore. For the last five years, IRCTC has been collecting and utilising all funds collected as convenience fee to run its operations, sources told NDTV.
The state-owned IRCTC is the only firm authorised 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 per cent 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 Rs 10 per share to Rs 2 per share. IRCTC board had announced the plan to split the stock on August 12.
As of 11:29 am, IRCTC shares traded 3.97 per cent lower at Rs 877.50, underperforming the Sensex which was down 0.2 per cent.
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