The government has rolled backed decision to charge 50% of revenue of the Indian Railway Catering & Tourism Corporation (IRCTC) that the railways ticketing arm earns from convenience fee.  

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The decision comes only a day after the government asked the IRCTC to share 50 per cent of the convenience fee with the Railway ministry.  

IRCTC tanks 20% as Railway ministry asks to share 50% of revenue from convenience fee

Singhvi had said the decision should be reversed as it will help all stakeholders, including the government, the IRCTC and retail shareholders. Zee Business Managing Editor said earlier if the government, which holds 67% stake in the company, sells 2 per cent of its stake almost all requirements of the government will be taken care of. " How does it matter that the government holds 67% or 65%? If the government cuts 2 per cent stake in the railways ticketing arm shares and make an FD of the revenue generated from it will be more than IRCTC convenience fee. This is a basic calculation without hurting any party. The ultimate goal is to earn revenue and that will be met if the government acts accordingly," said Singhvi.  

He further said that this will hurt IRCTC's prospect as a company with market cap size of Rs 1-lakh will come down to Rs 40,000 crore if decision is not reversed. "Infact, it is difficult to say how much it will affect IRCTC in the longer run. It may even reduce further, depending on people's anger," said the Market Guru, adding that this move will also hurt the government's disinvestment plans going forward.  

Meanwhile, as the government decided to rollback decision, IRCTC stocks recovered to some extent from early morning trade losses and closed the Friday at Rs 842.05, down Rs 71.70 or 7.85% on BSE.