Shares of Indian Railway Catering and Tourism Corporation (IRCTC), online ticketing, tourism and catering arm of the Indian Railways, declined as much as 2 per cent to hit an intraday low of Rs 2,635.85 on the BSE. Dip in IRCTC's share price came on account of profit booking a day after it hit an all-time high of Rs 2,727.95 after it announced a stock split in ratio of 1:5.
"The board of IRCTC recommended the proposal for sub-division or split of company's one equity share of face value of Rs 10 each into five equity shares of face value of Rs 2 each," IRCTC said in a regulatory filing to the stock exchanges.
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, analysts said.
Meanwhile, IRCTC reported net profit of Rs 82.52 crore, compared to loss of Rs 24.60 crore in the corresponding quarter last year. IRCTC's revenue from operations came in at Rs 243 crore, compared to Rs 131 crore in the same period last year, marking a growth of 85 per cent.
IRCTC is a wholly-owned subsidiary of the Indian Railways and provides e-ticketing, tourism, and catering services for passengers. The company was listed on the stock exchanges in 2019 and the government holds a 67 per cent stake in the company.
As of 1:55 pm, IRCTC shares were trading 1.2 per cent lower at Rs 2,657, underperforming the Sensex which was up nearly 1 per cent.
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