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Stock Analysis, IPO, Mutual Funds, Bonds & More

IRCTC falls for second day, slips to Rs 700

The IPO was subscribed 112 times during the offer period between September 30 and October 4.|
Updated: Oct 16, 2019, 04.04 PM IST
After a stellar debut on the bourses, the share price of Indian Railway Catering and Tourism Corporation (IRCTC) skidded for the second consecutive day on Wednesday amid brisk profit booking.

The stock was listed at over 100 per cent premium on Monday, doubling investors’ wealth on the very first day. It ended the day’s trade at Rs 728.60, up 128 per cent over issue price.

On Tuesday, the stock fell over 2 per cent, after hitting its all-time-high of Rs 748.90 in intra-day trade. On Wednesday, it slipped further to end 1.9 per cent down at Rs 700.

The IPO was subscribed 112 times during the offer period between September 30 and October 4. At the issue price, the stock quoted at 19 times FY19 EPS of Rs 17.

Analysts are upbeat about the long-term prospects of the stock. “IRCTC has a very unique business model. It has a monopoly in catering, e-ticketing and package drinking water. There is an aberration in e-ticketing, as the government had stopped it from charging service charge of Rs 15 and Rs 30 for non-AC and AC tickets. Going forward, it might be able to charge that. That will almost double their revenue to around Rs 240 crore to Rs 450 crore by FY21,” said Devang Bhat, analyst at ICICIdirect.

Astha Jain of Hem Securities said the stock has potential to offer good returns in next one year, and investors to book profit only partially.
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