IRCTC market cap crosses Rs 50,000 crore; stock surges 32% in one month

The stock has been in demand since the company announced proposed a stock split in August.

Shares of Indian Railway Catering and Tourism Corporation (IRCTC) continued their northward journey as the stock rallied another 9 per cent to register a new high at Rs 3,285 in Tuesday's intra-day session.

On Monday, the stock had broken into the elite Top-100 most valuable listed companies' club, and in today's session, the market capitalisation (market cap) of the transport support service provider crossed Rs 50,000 crore mark for the first time ever. In the past two trading days, the stock has surged 14 per cent on the BSE, and gained as much as 32 per cent in the last one-month, as against a 8 per cent rise in the S&P BSE Sensex.

With market capitalisation of Rs 52,416 crore, IRCTC stood at number 88th position in the overall market cap ranking on the BSE, the exchange data shows. IRCTC today surpassed agrochemical firm PI Industries, state-owned steel major Steel Authority of India (SAIL) and real estate company Macrotech Developers in market-cap ranking.

IRCTC is the only entity authorised by the Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India. It has a dominant position in online rail bookings and packaged drinking water with around 73 per cent and 45 per cent market share, respectively.

The stock has been in demand after the company announced its stock split plan. On August 12, 2021, the board of IRCTC approved a stock split in the ratio of 1:5 to enhance the liquidity in the capital market, widen the shareholder base and make the shares affordable to small investors. The board decided to split one equity share of the company at a face value of Rs 10 into five equity shares at a face value of Rs 2 each. This is subject to the approval of the Ministry of Railways.

The travel and tourism sector was the worst hit due to the Covid-19 pandemic. However, business revived gradually in the second half of the financial year 2020-21 (FY21). IRCTC ran Bharat Darshan trains in November’ 2020 with almost 61 per cent occupancy. In FY21, a total of 21 Bharat Darshan Trains & 4 Pilgrimage Special Tourist Trains operated with 13,312 passengers & 2,426 passengers, respectively. The company aims to resume train services as and when the shadow of Covid-19 lifts and passengers are assured of safely travelling to different parts of the country.

“IRCTC continues to improve its position as a ‘one-stop solution for varied travel and tourism needs. With our specialized services, we aim to improve experiences and offer passengers a convenient and hassle-free travelling experience. IRCTC has utilised the time to make direct tie-ups with Hotels & transportation companies across India for competitive rates,” the company said in the FY21 annual report.

IRCTC is planning to launch adventure tour packages and give emphasis on customised tour packages, especially for a small group of families and friends. It is also planning to operate cruise packages in the International & Domestic market if the scenario of the tourism market stabilises in future months, the company said.

The company further looks to provide value-added services to its stakeholders. IRCTC has planned various initiatives in the financial year 2021-22, including, monetisation of Chatbot Services & Train Information Enquiry Services through third-party organisations/operators, National Rail Museum booking website and Mobile App, provisions for issuance of digital bills and cashless payments in trains, ticket booking through Chatbot, EMI-based payment on the e-Ticketing Mobile App, online corporate travel services for Govt/PSUs, automated payments to hotels & bus aggregators/ vendors to reduce payment time, launch of wellness packages and tie-ups with five wellness institutions/yoga centres/hotels, etc, agent booking module for luxury tourist trains (Maharajas', Golden Chariot and Buddhist tours) etc.