IRCTC Stock Split: The board of Indian Railway Catering and Tourism Corporation (IRCTC) announced the stock split on Thursday. The board has approved a proposal to divide 1 share into 5 equity shares at a face price of Rs 2 at a face price of Rs 10.
Usually, when shares of a company become very high priced, small investors are not able to invest in those shares. So the company resorts to stock splits to attract small investors to its shares. The proposal has been sent by the IRCTC for Ministry of Railways, shareholders and other approvals.
It was only after this announcement that shares of IRCTC rose more than 5% to a new high of Rs 2,727 on the BSE today. IRCTC said the stock split will help increase liquidity in the capital market, increase the shareholder base and make shares affordable for small investors.
IRCTC Expects Process To Be Completed In 3 Months
IRCTC is hopeful that the process will be completed within three months from the date of approval from the Ministry of Railways, Government of India. The authorized share capital will remain the same at Rs 250 crore, while after partition the number of shares will increase from 25,00,00,000 to 125,00,00,000 (marked price of each Rs 2-each).
IRCTC stepped into the capital market in October 2019 and its IPO was a huge hit among retail investors. Issue price of the multi-bagger stock was Rs 320 per share and gave good returns to investors. The government has a 67.40 per cent stake in this Railway company.
IRCTC is the only unit authorised by Indian Railways to provide catering services, online railway tickets and packaged drinking water at railway stations and trains in India.
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