The ministry of railways has asked its catering and tourism arm Indian Railways Catering and Tourism Corporation (IRCTC) to share 50% of convenience fee the company earns.
The ministry of railways via letter has conveyed its decision to share the revenue earned from convenience fee collected by IRCTC in the ratio of 50:50 with effect from November, IRCTC said in a filing.
Till now, IRCTC has kept 100% of the convenience fee it earned from customers for providing various services.
IRCTC shares were up 11.74% to close at ₹923 on NSE as the stock traded ex-split today. The record date has been set as October 29, Friday for the sub-division of equity shares of ₹10 each into five equity shares of ₹2 each.
The company has announced a stock split during the first quarter. IRCTC is in a pure monopoly business as it is the only authorized firm to provide online tickets and catering services to the Indian Railways.
The state-owned company has 100% market share in rail network. It’s also the only entity authorised to manage catering services on trains and major static units at railway stations.
The stock has given stellar returns to investors since the listing in October 2019. Since the start of 2021, the scrip has surged over 200% and by massive 246% in past one year.
The stock split will help enhance liquidity in the capital market, widen shareholder base and make the shares affordable to the small investors, the company had said earlier.
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