IRCTC will lose a chunk of its revenue to the Indian government starting next month

• The government has asked railway company IRCTC to share 50% of its revenue from convenience fees.
• The development may impact the company’s revenues going ahead.
• Shares of the company ended nearly 12% higher today as the stock got split in the ratio of 1:5.

India’s Ministry of Railways has asked the Indian Railway Catering and Tourism Corporation (IRCTC) to share 50% of revenues coming from service charts on e-ticketing, i.e., convenience fees, with the government.

The company will start sharing half of the convenience fees with the government from November 2021.

The development might impact the company’s revenue coming from the e-ticketing service charge segment. In FY21, IRCTC earned ₹299 crore from this segment, which is almost 40% of its revenue from operations of ₹783 crore.

So far, IRCTC did not share revenues from this segment with the Indian government.

Shares of the company ended nearly 12% higher on October 28 as the stock got split in the ratio of 1:5.

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