Last Updated on Oct 29, 2021 by Ayushi Mishra
Indian Railway Catering & Tourism Corporation (IRCTC) increased by ~15% on 28 October 2021 when the shares traded ex-split. The record date has been established for Friday, 29 October 2021, for the subdivision of one equity share of Rs. 10 into five equity shares of Rs. 2 each.
The board of directors of the firm will meet on 1 November 2021 to review and approve the unaudited financial statements for the second quarter and half year ended 30 September 2021.
A stock split increases the number of shares of a company but does not imply that the stock has become less expensive. It does not affect the company’s fundamentals. In the case of IRCTC, the total number of shares will rise 5x (fivefold), but the price per share would fall. This, in turn, does not affect the firm’s market capitalisation. This just boosts the stock’s liquidity by lowering its stock price, making it more affordable to investors.
Its share prices saw a dip when the Ministry of Railways issued a 50% revenue sharing notice on 28 October 2021. However, it withdrew the notice on the morning of 29 November 2021, resulting in a significant recovery of IRCTC stock on the stock market.
IRCTC is the only firm authorised by Indian Railways to serve meals, online ticketing services, and bottled water at railway stops and in trains. Its stock price was rather high for small investors before the split, but after the split, the share price had dropped to a more appealing price of ~Rs. 900. Read about stock split on Blog by Tickertape to understand it in a much clearer way.
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