The Indian Railway Catering and Tourism Corporation (IRCTC) on Thursday informed the stock exchanges that it will share half of the revenues earned from convenience fees with the government.
IRCTC charges a convenience fee for online bookings, and this is one of the key revenue streams for the company, fetching around Rs 620 crore for FY20.
"In compliance with the Regulation 30 of SEBI Regulations, it is to be informed that the Ministry of Railways has conveyed its decision to share the revenue earned from convenience feel collected by IRTC in the ratio of 50:50 effective November 1, 2021," the company said in a stock exchange filing.
The roller coaster ride in IRCTC shares over the last couple of weeks seems to suggest that some players in the market may have had a whiff of the impending announcement.
IRCTC shares rallied to a high of around Rs 6,400 on October 19 and then collapsed to below Rs 4,000 over the next couple of trading sessions. During the run-up, massive out of the money call and put options had been written in the stock.
On the day of the collapse, there were rumours that the government would appoint a regulator for the railways.
At Thursday’s closing price of Rs 923 (adjusted for a 5:1 stock split), the stock is still down roughly 30 percent from its record high.
Earlier this week, CNBC-TV18.com
had flagged the unusual activity in the options of the stock. Read more about it here:
(Edited by : Jomy Jos Pullokaran)
First Published: Oct 28, 2021 5:10 PM IST