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IRCTC shares sharply off lows; DIPAM Secy says railways will withdraw convenience fee sharing decision

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IRCTC shares recouped most of its steep losses today after CNBC-TV18 reported that Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM) said that the Railways will withdraw convenience fee decision on IRCTC.

IRCTC shares sharply off lows; DIPAM Secy says railways will withdraw convenience fee sharing decision
Shares of Indian Railway Catering and Tourism Corporation (IRCTC) sharply came off its day's low today and were down merely 5.5 percent on the BSE.
IRCTC shares recouped most of their steep losses today after CNBC-TV18 reported that Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM) said that the Railways will withdraw convenience fee decision on IRCTC.
"I think in that context, railways have reviewed that decision and withdrawn it. I believe that since the decision was out, and obviously the railways have looked at it also as our advice and of course, we also attended advice to relook at it. There will be official communication from railways on this development soon,” Pandey told CNBC-TV18.
The stock had crashed over 20 percent earlier today after the company said that it will share half of the revenues earned from convenience fee with the government.
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IRCTC charges a convenience fee for online bookings, which is one of the key revenue streams for the company. It fetched around Rs 620 crore in FY20.
In a statement on Thursday, IRCTC said that the company and the Ministry of Railways will share the revenue earned from convenience fee in the ratio of 50:50 with effect from November 1, 2021.
IRCTC shares have been witnessing high volatility for the last few days.
Broking firm IIFL has slashed its price target for the stock to Rs 519 from Rs 820 earlier and rated it a sell.
“The Railway Ministry’s decision to impose 50 percent revenue share on IRCTC’s convenience fee income from internet ticketing, from Nov 1, 2021, vs. nil share currently, is a significant negative,” the IIFL note to its clients said.
 
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