IRCTC stock price soars to fresh high on likelihood of share split

Shares end 6.9% higher on Monday from Friday's close; up 17.5% from a month ago

Shares of Indian Railway Catering and Tourism Corporation (IRCTC) have been on a steady rise and are up 17.5 per cent from a month ago. On Monday itself, the IRCTC scrip closed 6.9 per cent higher, from Friday’s closing, to Rs 2,659.70 a share on the National Stock Exchange.

The Rail Ministry Public Sector Undertaking (PSU) stock has been charming traders with the news of a share split expected during the Company Board on August 12. On July 30, IRCTC informed the exchanges that the Company Board would decide on recommending a proposal for sub-division of Company's equity shares of face value of Rs 10 each. This will be subject to the approval of Ministry of Railways, Government of lndia and shareholders.

Another strong sentiment positive sentiment for IRCTC is coming from the increasing Covid-19 vaccinations and possibility of more train bookings. The internet ticketing website besides being one of the largest e-commerce websites in Asia pacific books 83 per cent of the total reserved tickets over the Indian railways. The opening up of the Mumbai local trains to those fully vaccinated against Covid-19 is also a positive sentiment driver for IRCTC.

Besides these immediate supports, IRCTC is also dabbling with private train operations. This too is an opportunity for the PSU to find more avenues of generating earnings and solidifying its dominant position.