New Delhi: The Ministry of Railway has withdrawn the decision to take 50 per cent of the Indian Railway Catering and Tourism Corporation (IRCTC) revenues earned from convenience fees. According to media reports, the plan was to take action from Monday.
Department of Investment and Public Asset Management (DIPAM) secretary confirmed this decision on social media platform Twitter.
According to a News18 report, the stocks of IRCTC fell dramatically on Friday itself after the state-owned firm which authorised to manage food services on trains was asked to share revenue with the Ministry from November 1, 2021. IRCTC has a monopoly in the online ticketing and catering services for the Indian Railways.
IANS reported that the company's scrip at the BSE traded at Rs 863.30, down 50.45 or 5.52 per cent around 12.00 p.m. from its previous close of Rs 913.75. The stock opened deep in the red at Rs 822.40.
It plunged to an intraday low of Rs 650.10 but recovered thereafter.
According to Santosh Meena, Head of Research, Swastika Investmart told IANS, "It is a big negative surprise for the investors of IRCTC as the government has asked the company to share half of its convenience fee from the Internet booking."
"It will be difficult to take action after a big gap down opening, therefore existing shareholders are advised not to act as the other fundamentals of the company are still strong," he further added.