New Delhi: The shares of India Railway and Tourism Corporation (IRCTC) on Friday recovered after falling by 29 percent to Rs 650 apiece in the early trading as the Rail Ministry had asked the latter to pay 50 percent of the convenience fee to them.
''Ministry of Railways has decided to withdraw the decision on IRCTC convenience fee. The decision was reversed within 19 hours after the massive fall in stock price,'' Secretary, DPIAM tweeted on Friday.
Earlier, following the convenience decision, the ticketing margin was expected to come down from 85 percent to 48 percent. Following this a huge fall was seen in the share of IRCTC today.
Notably, the online booking of railway tickets is done by IRCTC. It also provides food and drink in trains.
The IRCTC on Thursday also informed Bombay Stock Exchange (BSE) that it would now share the convenience fees received from booking tickets from its platform with the government in the ratio of 50:50.
In another important development, IRCTC has split its stock in the ratio of 1:5. The IRCTC share split date is on 29 October i.e. on Friday. The IRCTC board had approved the stock split in a meeting held on August 12 this year.
Stock split in the ratio of 1:5 means that each share will be divided into five shares.
This will reduce the value of the stock, making it easier for retail investors to buy and trade it. IRCTC stock touched a record high of Rs 6,369 on 19 October.
What is Stock splitting?
A stock split increases the number of shares of a firm. For example, the stock split of IRCTC has happened in the ratio of 1:5. This will increase its total number of shares by 5 times, but it will reduce the share price. However, this will not affect the market capitalization of the company.
The main reason behind a stock split is to make the shares more affordable for the shareholders. This usually happens after the stock prices go up significantly.
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