IRCTC plummets 32% from record high after rallying nearly 300% in 6 months

After touching Rs 1 trillion intraday on Tuesday, the firm's m-cap ended around Rs 71,000 crore on Wednesday

The shares of Indian Railway Catering and Tourism Corporation (IRCTC) tanked over 18 per cent in Wednesday’s intra-day trade to Rs 4,371 on the BSE, compared with its previous close, amid heavy volumes. At close, it was at Rs 4,432.95 - down 17.3 per cent on the BSE. A combined 21-million equity shares changed hands on the National Stock Exchange and the BSE.

With this, the stock is down 25 per cent in the past two trading days as a result of profit booking. The fall is steeper if the all-time high of Rs 6,393 it scaled to in Tuesday's intra-day trade is taken into consideration.

The stock of the state-owned travel support services has tumbled 30.7 per cent from its record high of Rs 6,393, amid buzz that the government is appointing a regulator for the rail sector.

A sharp decline in the stock price has seen investors lose Rs 32,000-crore wealth in the past two days. According to Wednesday’s closing, IRCTC’s market capitalisation (m-cap) declined to Rs 70,927 crore. Its m-cap had touched Rs 1.02 trillion in intra-day trade on Tuesday.

In the past six months, the stock had appreciated nearly 300 per cent, from the levels of Rs 1,612, before its descent. In comparison, the S&P BSE Sensex is up 30 per cent during the same period till Tuesday.

Further, IRCTC shares will turn the ex-date for the stock split in the ratio of 1:5 on October 28. IRCTC has fixed October 29 as the record date to ascertain the name of shareholders entitled to the subdivision/split of equity shares of Rs 10 each into five equity shares at a face value of Rs 2 each. The board of IRCTC approved a stock split in the ratio of 1:5 on August 12.

A stock split is generally undertaken to make the stock more affordable to small retail investors and increase liquidity. It refers to splitting the face value of shares, in which the number of shares of the company increases but the m-cap stays the same. Existing shares split, but the underlying value remains unchanged. As the number of shares increases, the price per share goes down.

IRCTC is the only entity authorised by the Indian Railways to provide catering services to the national transporter, online railway tickets, and packaged drinking water at railway stations and trains in India.