IRCTC doubles investor wealth as its stock surges 128% on listing

• From its issue price of ₹320, IRCTC share prices surged to ₹728 by the time the markets closed.
• Even when IRCTC had opened for subscription between September 30 and October, it was oversubscribed 112 times.
• In FY19, IRCTC’s total revenue stood at ₹19,566 million.

Indian Railway Catering and Tourism Corporation (IRCTC) had a blockbuster debut on the stock exchanges today – as it doubled investor wealth on the very first day of its listing.

From its issue price of ₹320, IRCTC share price rose to ₹728 by the time the markets closed. Its stock price rise was also aided by healthy global cues also pushed the Sensex up by 150 points in early trade, though it ended adding 87 points for the day.

Owned by the Indian government, IRCTC is the only authorized company that sells Indian Railway tickets online. Since it virtually has no competition and railway tickets are constantly in demand, investors were excited with its IPO, which was oversubscribed by 112 times over.

Being one of the world’s busiest sites for ticketing, IRCTC’s transaction volume averages between 25-28 million a month. In FY19, IRCTC’s total revenue stood at ₹19,566 million.

“Levy of convenience fee on ticket bookings and commissioning of six new Rail Neer plants is expected to aid IRCTC’s revenue CAGR at 16% over FY19-21E,” IIFL securities had said in its IPO note.

However, IRCTC also comes with its own risks since it serves only one client . “IRCTC’s business and revenues are substantially dependent on Indian Railways. Any adverse change in policy of the Ministry of Railways may adversely affect the business and financials,” IIFL Securities had said.