IRCTC now among 100 most valuable firms on BSE; zooms 97% from April low

With Rs 48,213 crore market capitalisation (market cap), IRCTC stood at 95th position in the overall market cap ranking on the BSE, the exchange data shows

Indian Railway Catering and Tourism Corporation (IRCTC) entered the top 100 most valuable listed companies' club after the stock of the transport support services firm hit a new high of Rs 3,041.20, up 6 per cent on the BSE in intra-day trade on Monday. The stock has rallied 97 per cent from its low of Rs 1,541 touched on April 19, 2021.

With Rs 48,213 crore market capitalisation (market cap) as of 11:44 am, IRCTC stood at 95th position in the overall market cap ranking on the BSE, the exchange data shows. The state-owned company surpassed Colgate-Palmolive (India), Cholamandalam Investment and Finance Company, Hindustan Aeronautics (HAL), Balkrishna Industries, ACC and Bandhan Bank in the market cap ranking today.

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.

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.

A stock split is generally done to make the stock more affordable for the small retail investors and increase liquidity. It refers to splitting the face value of the shares of companies, wherein the number of shares of the company increases but the market cap remains the same. Existing shares split, but the underlying value remains the same. As the number of shares increases, the price per share goes down.

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 Train 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.