IRCTC: FIIs, MFs trim stake - Data details from September quarter

The foreign institutional investors and Mutual Fund houses have been trimming the stake in the state-run company Indian Railway Catering and Tourism Corporation (IRCTC). The former has reduced around a quarter per cent holding, while the latter has slashed nearly 2.5 per cent holding in the company.

According to the trendlyne, FII/FPI have decreased the holdings in the company to 7.81 per cent from 8.07 per cent in the September 2021 quarter. Since the last four quarters the FIIs gradually reduced their stake in the company since the last three quarters.

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In December 2020 quarter, FIIs had an 8.38 per cent stake, which was slashed to 8.17 per cent in the March 2021 quarter, eventually, it got more trimmed in June 2021 quarter to 8.07 per cent and the trend continued in the September 2021 quarter, this is perhaps seen as profit booking, as per terndlyne.

Similarly, Mutual Fund houses have trimmed their stake in the government-owned company for the second straight quarter. In September 2021 quarter, the MFs have almost slashed 40 per cent of their holding to 4.78 per cent from 7.28 per cent in the June 2021 quarter, trendlyne data shows. 

Of all MF houses, Motilal Oswal Midcap 30 Regular growth has a maximum stake in the company of around 9 per cent, which aggregates to 5,60,000 equity shares in the IRCTC, followed by Mahindra Manu Arbitrage Yojana 6.31 per cent stake, Edelweiss Recently Listed IPO Fund 5.77 per cent stake and IDBI Flexi Cap Fund 4.04 per cent, according to the trendlyne data.

As many as five MF houses have between 3-4 per cent stake in the company, while 15 MFs have held in the IRCTC between 2-3 per cent, the trendylne data shows.

As the government on Thursday announced IRCTC (Indian Railway Catering and Tourism Corporation) to be sharing 50 per cent of the convenience fee with the Ministry of Railways, the stock on Friday plunged over 40 per cent intraday to Rs 650 per share. 

However, seeing the freefall in the stock price of IRCTC, the government rolled back the decision and eventually stock recovered to eventually end over 7 per cent lower to Rs 845.65 a share on the BSE.

Image Source: Trendlyne

The stock from Thursday has started trading in a split of 1:5. The stock has so far corrected to around 50 per cent as compared to its today’s low of Rs 650 per share and life high level of 1278.6 per share. On the closing basis, it has slipped over 34 per cent from its record highs.

The reason behind this correction is so far could be considered as to how institutional investors – both foreign and domestic, as well as mutual funds, have reduced their stake in the state-run company. IRCTC has a monopoly of an e-ticket for Indian Railways and also in the catering business in the trains.