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IRCTC shares sharply recover after Govt scraps order on 50% convenience fee revenue sharing

IRCTC share price: The IRCTC scrip had crashed to Rs 639.45 apiece, down 30 per cent from its previous close on the NSE, while on the BSE, it fell as much as 28.85 per cent to Rs 650.10.

Shares of Indian Railway Catering and Tourism Corporation (IRCTC) staged a sharp recovery in the late morning trade on Friday after the government withdrew its order seeking a 50 per cent share in the convenience fee revenue with the Ministry of Railways.

“Ministry of Railways has decided to withdraw the decision on IRCTC convenience fee,” Secretary of Department of Invesment and Public Management (DIPAM) informed in a tweet.

At 12:00 pm, the stock was trading at Rs 861.00, down 5.77 per cent on the BSE, while on National Stock Exchange (NSE), it was down 5.58 per cent at Rs 862.55.

Nearly 6.5 crore shares have been traded so far on the NSE while over 50 lakh shares have exchanged hands on the BSE.

Earlier in the day, the stock of the government-owned travel support services company had opened lower and quickly crashed to a 30 per cent lower circuit in the early morning trade after the company informed that Railways has ordered it to share 50 per cent of its revenue earned as convenience fee from bookings on its website with the national transporter.

The scrip had crashed to Rs 639.45 apiece, down 30 per cent from its previous close on the NSE, while on the BSE, it fell as much as 28.85 per cent to Rs 650.10.

The sharp recovery in the IRCTC stock came after the DIPAM Secretary said the Railways will withdraw the decision on convenience on IRCTC.

On Thursday, in an exchange filing to the stock exchanges after market hours IRCTC had said, “ln compliance with the Regulation 30 of Securities and Exchange Board of lndia (Listing Obligations and Disclosure Requirements) Regulations,2015, it is to be informed that Ministry of Railways vide above referred letter has conveyed its decision to share the revenue earned from convenience fee collected by IRCTC in the ratio of 50: 50 w.e.f 1st November 2021.”

IRCTC charges a convenience fee from its customers for all ticket bookings done on its online platform. It is one of the main sources of revenue for the company and has fetched them approximately Rs 620 crore in the financial year 2019-20 (FY20).

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