The Indian Railways’ wholly-owned listed subsidiary, Indian Railway Catering and Tourism Corporation (IRCTC), on Thursday announced a split of its equity share of the face value of Rs 10 each into five equity shares of the face value of Rs 2 each. The company’s board approved the proposal for share split in earnings call on Thursday.
Shares of IRCTC surged 6 percent to hit a 52-week high of Rs 2,727. It was last trading 5 percent higher at Rs 2,693 on BSE. The stock split is subject to the approval of the ministry of railways and the government of India.
It announced late in July that the board would consider recommending a proposal of a stock split. A company splits its shares to increase the number of outstanding shares by issuing more shares to current shareholders. After the split is carried out, the price of stocks will also reduce.
While its authorised shares will remain the same, its number of shares will increase from 125,00,00,000 to 25,00,00,000. IRCTC said the decision will help enhance liquidity in the stock market, make the shares affordable to small investors, widen its shareholder base.
The company expects completion of the process within three months of approval from the shareholders.
The company today reported its first-quarter results. It reported a net profit of Rs 82 crore for the June quarter, after posting a loss of Rs 24 crore in the year-ago period. Its revenue from operations rose 85.4 percent to Rs 243 crore.
The internet ticketing website is one of the largest e-commerce websites in Asia-Pacific. Over 83 percent of the tickets for Indian railways are booked via the IRCTC website.
First Published: IST