IRCTC's Shares Swing 22% To End With Losses After Hitting Market Cap Of Rs 1 Lakh Crore
Indian Railway Catering & Tourism Corp. surged to hit the milestone of Rs 1 lakh crore in market value but ended the day with losses after a wild swing.
The company’s shares hit a record of Rs 6,384.14 apiece in intra-day trade on Tuesday. The stock, however, tumbled 21.7% from the day's peak to Rs 4,995.8 in the last hour of trading. It closed at Rs 5,454.9 apiece, down more than 7% and at a market cap of Rs 85,808 crore.
Shares of IRCTC have surged about 338% in 2021 so far amid rising interest for internet companies in India. Since listing a little over two years ago, the the stock has soared 1,860% over its IPO price.
The surge in the morning briefly made the ticketing firm the ninth public-sector unit with a market cap of at least Rs 1 lakh crore.
IRCTC, the only authorised online ticket seller for the Indian Railways, is a dominant player in rail travel market will 66% of all rail tickets booked in India in FY21 coming through the platform.
The railway catering and ticketing services provider's rally has accelerated after a stock announced on July 30. Since then, shares of IRCTC have advanced over 170%.
IRCTC has fixed Oct. 29 as the record date for the 1:5 stock split, approved on Aug. 12.
And investor interest in new-age tech companies like Zomato Ltd., too, has rubbed off.
Increased travel as the economy has reopened is also likely to aid IRCTC's business. According to analysts at Dalal and Broacha, the resumption of fresh food services and price increase in menus of Rajdhani, Shatabdi, Duronto and express trains would act as positive trigger.
All the eight analysts tracking the company suggest a 'Buy'. The stock, however, has surpassed analyst expectations. The average of 12-month price targets compiled by Bloomberg implies a downside of 50.3%.
The stock's relative strength index is at 92, suggesting it may be overbought. Trading volume on the stock was two times the 30-day average volume for this time of the day.