IRCTC crosses ₹1 lakh crore in market cap for the first time as investors adore its monopoly

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IRCTC crosses ₹1 lakh crore in market cap for the first time as investors adore its monopoly
BCCL
  • Shares of Indian Railway Catering and Tourism Corporation have surged as much as 30% in just the last five days paving the way for the company to cross the ₹1 trillion-mark.
  • The railway company’s stock has grown a whopping 334% in 2021 so far.
  • Among other triggers fuelling the stocks, the latest one is the company starting many special tourist trains for the festive season.
Investors value companies operating in a monopolistic business and Indian Railway Catering and Tourism Corporation (IRCTC) is a true example of that. The company’s market capitalisation has touched ₹1 trillion as its stock spiked about 8% on Tuesday, October 19.

The railway company added ₹30,000 crore in market cap in just nine days as its shares continued to rally. The share price has skyrocketed 712% since it got listed in October 2019.

IRCTC has become one of investors’ favourite stocks because of its monopoly in rail ticket booking.

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Currently, one of the major triggers fuelling the rally in the stock is the company starting many special tourist trains for the festive season.

The stock was trading at ₹6,343 per share at 9:56 a.m., on Tuesday. The market cap of the company has crossed ₹1 trillion and is currently at ₹1.01 trillion. However, later in the day shares of the company suddenly corrected 15%.

Apart from this, investors are awaiting development on the company’s plan to split the stock. On August 12, IRCTC approved a stock split in the ratio of 1:5 to enhance the liquidity in the capital market, widen the shareholder base and make the shares affordable to small investors. A stock split is generally done to make the stock more affordable for the small retail investors and increase liquidity.

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Moreover, its expansion plan in the hospitality sector has also impressed investors over the period of time.

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