Shares of Indian Railway Catering and Tourism Corporation (IRCTC) plunged on Friday morning on the back of revenue share issue with the Indian railways. However, the stock rebounded once the Ministry of Railways said on Friday that it has decided to withdraw the decision on convenience fee.
In the morning, the company's scrip at the BSE traded at Rs 863.30, down 50.45 or 5.52 per cent around 12.00 p.m. from its previous close of Rs 913.75. The stock opened deep in the red at Rs 822.40. It plunged to an intraday low of Rs 650.10 but recovered thereafter following the ministry's decision to withdraw.
On Thursday, IRCTC informed the BSE, that Ministry of Railways' decision to share the revenue earned from convenience fee collected by IRCTC in the ratio of 50:50 from November 1, 2021.
According to Santosh Meena, Head of Research, Swastika Investmart: "It is a big negative surprise for the investors of IRCTC as the government has asked the company to share half of its convenience fee from the Internet booking."
"It will be difficult to take action after a big gap down opening, therefore existing shareholders are advised not to act as the other fundamentals of the company are still strong."
Sensex, Nifty trade lower
Otherwise, mixed global cues dented India's key equity indices - S&P BSE Sensex and NSE Nifty50 - in the morning session. At 10 a.m., the 30-scrip sensitive index traded at 59,779.89 points, down 204.81 points or 0.34 per cent.
The Sensex opened at 59,857.33 points from its previous close of 59,984.70 points. Besides, the NSE Nifty50 traded at 17,785.70 points, lower by 71.55 points or 0.40 per cent. It opened at 17,833.05 points from its previous close of 17,857.25 points.
