IRCTC shares have listed with a gain of over 103% compared to its issue price of Rs 320 per share. According to BT, Indian Railway Catering and Tourism Corporation shares listed at Rs 644 on the Bombay Stock Exchange and Rs 651 on the National Stock Exchange today, seeing a subscription of nearly 112 times on the last day of the initial public offering (IPO). The IPO was open for subscription between 30th September and 4th October.
At 10 in the morning, the stock was trading at Rs 652.15 on BSE, up by 103% from its issue price. In the previous two fiscal years, IRCTC has clocked a 10.3% annual growth, with revenues soaring to Rs 1,868 crore in the FY’19. However, its profits after tax margins fell from 14.3% in FY’17 to 13.9% in FY’19.
Over the last two years, IRCTC has high return ratios with RoCE (return on capital employed) and RoE (return on equity) of 25% with dividend payouts of more than 40% of net profits, higher than the regulatory norm of 30%. Analysts mentioned healthy cash balances provide comfort against business uncertainties.
IRCTC- internet ticketing, catering, packaged drinking water and more
IRCTC is a government-run firm and only organization authorized by Indian Railways to provide catering services to railways, packaged drinking water at railway stations and trains, and online railway tickets in India.
Presently, IRCTC operates in four business segments, namely, internet ticketing, catering, packaged drinking water, and travel & tourism. The firm has also expanded into other businesses, including services like e-catering, executive lounges, and budget hotels. Catering services, internet ticketing, packaged drinking water, and travel & tourism contribute 55%, 12%, 9%, and 24% respectively to the FY’19 revenues.
IRCTC has one of the largest websites that observe 7 million logins each day. The firm has reinstated the convenience fee in the range of Rs 10-30 per booking on its mobile and web platforms. Indian Railway Catering and Tourism Corporation handles 2.5 crore transactions per month and has seen an incremental revenue potential in the range of Rs 300-900 crore. According to the management, the majority of revenues are likely to flow to the bottom-line.