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IRCTC, the tourist and catering arm of Indian Railways, Announces Stock Split; Stock Rises To All-Time High

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IRCTC saw net profit of Rs 82 crore for June quarter versus loss of Rs 24 crore in year-ago periodIRCTC, the tourist and catering arm of Indian Railways, has actually revealed a stock-split in the ratio of 1:5 to assist enhance liquidity in the capital market, widen shareholder base and make the shares inexpensive to small financiers.

One IRCTC share with a stated value of Rs 10 will be split into 5 shares of face value of Rs 2 each.

The board of IRCTC today recommended the proposition for sub-division or split of company's one equity share of stated value of Rs 10 each into five equity shares of face value of Rs 2 each, IRCTC said in a regulatory filing to the stock market.

The choice on the stock-split undergoes the approval of Ministry of Railways, investors and other approvals.

The procedure is likely to be completed within three months from the date of receipt of approval from the Ministry of Railways, IRCTC said.A company's authorised share capital stays the same in a stock-split, however the market rate decreases in proportion to the split ratio and this results in a greater number of shares offered in the secondary market.

The reduction of the market rate and boost in liquidity makes the shares cost effective to retail buyers.Meanwhile, IRCTC revealed turn-around outcomes for the June quarter, reporting a net earnings of Rs 82 crore for the quarter as against a loss of Rs 24 crore in the year-ago period.IRCTC shares rose to a brand-new high of Rs 2,727 on the BSE post the share split statement.

At 3:10 pm, the shares were trading at Rs 2688, up 4.5 percent on the BSE.IRCTC offers catering services, online train tickets and packaged drinking water at train stations and trains throughout India.

The federal government holds 67.40 per cent stake in the company.




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