IRCTC stock recovers losses as government reportedly withdraws decision on convenience fee revenue share
- A media report said that DIPAM Secretary confirmed the withdrawal of its decision of sharing revenue from convenience fees.
- The government had yesterday asked
IRCTCto share 50% of revenue coming from service charts on e-ticketing, i.e., convenience fees.
- Shares of IRCTC, which had slipped more than 25% on Friday morning, recovered on this news.
AdvertisementThe Indian government has reportedly withdrawn its decision of asking 50% of Indian Railway Catering and Tourism Corporation’s (IRCTC) revenue from convenience fees.
CNBCTV-18 reported that the secretary at the department of investment and public asset management (DIPAM) confirmed the withdrawal of its decision of sharing revenue from convenience fees.
Shares of IRCTC recovered after a sharp fall on Friday morning trade on the announcement of sharing half of its convenience fees with the government.
On October 28, after the railway company informed stock exchanges of the government’s decision, many investors had criticised the move on social media portals.
Shares of Indian Railway Catering and Tourism Corporation recovered after losing more than 25% in the early trade on announcement of government asking IRCTC 50% of revenue coming from service charts on e-ticketing, i.e., convenience fees, with the government.
The move came as a big shock to investors as it meant IRCTC would have to share a chunk of its revenue with the government. In FY21, IRCTC earned ₹299 crore from this segment, which is almost 40% of its revenue from operations of ₹783 crore.
At 11:11 a.m. shares of the company were trading 4% lower at 875.95 per share.
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