IRCTC Stock Split: Everything to know about it
Along with the IRCTC stock split, the IRCTC board of directors approved unaudited financial results for the June 30th quarter. Additionally, IRCTC sells online tickets and packaged water in addition to providing catering services for Indian Railways.
In a statement issued on Thursday, the board of directors of Indian Railway Catering and Tourism Corporation (IRCTC) announced that the company’s equity shares will be split into five. This means that one-tenth of a share will be split into five equity shares with a face value of *2, each.
Announcement about IRCTC Stock Split
Railway’s ministry and other shareholders have to approve the move, IRCTC said.
According to a statement from the IRCTC, “the Board recommended dividing five (5) equity shares into one (1) equity share of face value $10 in each, subject to approval by the Ministry of Railways, shareholders, and any other necessary approvals.”
As compared to the same period last year, operating revenue jumped 85.4 percent to Rs 243 crore. Also, the board of the IRCTC has approved splitting one share of Rs 10 face value each into five shares of Rs 2 face value each. Railway Ministry approval is required for this project.
Objectives of IRCTC Share Split
Among the company’s stated objectives are to enhance liquidity in the capital market, expand shareholder bases, and make shares accessible to small investors.
In the morning trade after the IRCTC Share split decision generally was announced, the stock was up almost 3 percent from a low of Rs 2,605 to a sort of high of Rs 2,728, an all-time high, which specifically is fairly significant. Shares of the company particularly were trading 4.7% for all intents and purposes higher on NSE at Rs 2,693.
It demonstrates that in the morning trade after the IRCTC Share split decision actually was announced, the stock, for the most part, was up almost 3 percent from a basically low of Rs 2,605 to a high of Rs 2,728, an all-time high, or so they specifically thought. Catering segment revenue literally declined 37 percent to Rs 56 crore from Rs 89 crore a year ago, or so they for the most part though.
More than 300 percent of tickets sold online went to the tourism category, whereas revenues from Internet ticket sales increased more than double to Rs 7 crore.
About Stock Split
Shares of stocks are issued to existing investors without dilution of their value. By splitting a stock, more shares are issued and each share’s value is lower.
The company, however, remains unaffected in terms of its market capitalization.
Why IRCTC Stock Split
In many corporations, the board decides to split the stock when they want to either attain a target or create more liquidity by making the stock price more attractive for small investors.
In most splits, stockholders receive two, three, or four shares for every share held, depending on the split. A shareholder who holds a 1 share of IRCTC becomes a five-share holder. After the split, Livemint reports that there will be 125,000,000 shares instead of 25,000,000.
Following approval by the government of India, Livemint reported that IRCTC expects to complete the stock split within three months. As stated in the release, the IRCTC Board of Directors met at 12:30 pm and concluded at 2 pm.
IRCTC’s board also approved unaudited financial results for the quarter ended June 30 along with voting on the stock split. Only IRCTC serves Indian railway stations and trains with catering, online tickets, prepackaged drinking water, and online railway tickets. Thus, this is everything we have got to know about IRCTC Stock Split.