Shares of IRCTC today slumped as much as 7% to ₹1,380 at day’s low as some investors booked profit ahead of its Q3 earnings, scheduled tomorrow. IRCTC shares today traded in the range of ₹1,505 to ₹1,380 before finishing 5% lower at ₹1,406.
IRCTC shares had hit a record high of ₹1,562 last week, continuing their strong show since the market debut in October. The government held an 87.40% stake in the Railways subsidiary as of the quarter ending December 2019 while mutual funds held 4.78% stake and foreign portfolio investors 1.99%.
Low floating stock and monopoly business are some of the reasons attributed by analysts for the strong run in IRCTC shares.
Meanwhile, Indian Railways’ third privately operated train is all set to be launched later this month. The IRCTC-operated train will run between Indore and Varanasi. Currently, IRCTC also operates Delhi-Lucknow and Mumbai-Ahmedabad Tejas Express.
Finance Minister Nirmala Sitharaman in Budget 2020 had announced that more Tejas-type trains will be launched to connect iconic tourist destinations.
The government’s plans to let private players run passenger trains have attracted over two dozen firms, including Tata Realty and Infrastructure, Bombardier, Hyundai Rotem Company, CAF India, Hitachi India, and South Asia, Essel Group, Adani Ports and SEZ, Talgo, Siemens, and Alstom Transport.
While the infrastructure, maintenance, operations, and safety will continue to be handled by the Indian Railways, private train operators can take rakes on lease and provide better on-board experience and services to passengers, in terms of food, comfort, entertainment, among others.