IRCTC Share: Market cap hits Rs 1 Trillion then nosedives 21.7% from the day’s peak

New Delhi: On the sunny Tuesday afternoon when Indian Railway Catering & Tourism Corp (IRCTC) shares surged to an all-time high of Rs 6,384.14 apiece in intra-day trade, the Railways PSU became the ninth PSU to mark the market capitalization (m-cap) of Rs 1 trillion. However, the stock nosedived 21.7% from the day's peak to Rs 4,995.8 per share in the last hour of trading. IRCTC shares finally closed at a market cap of Rs 85,808 crore.

IRCTC rally comes to an end?

Overall, markets were extremely volatile on Tuesday. The Sensex after hitting 62,000 in early trade ended down 49 points. Major profit booking was seen in midcap and smallcap space. 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 stock has soared 1,860% over its IPO price. IRCTC, the only authorised online ticket seller for the Indian Railways, is a monopoly player in the rail travel market will 66% of all rail tickets booked in India in FY21 coming through the platform.

The IRCTC shares rally accelerated after the stock was announced on July 30. Since then, scrips of IRCTC have advanced over 170%. IRCTC has fixed October 29 as the record date for the 1:5 stock split, approved on Aug. 12. 

What caused a fall in IRCTC shares?

According to the news of CNBC-Awaaz, there is a preparation for the regulator in the railways. RITES has given a suggestion for the appointment of a regulator in one of its reports. After the report of RITES, now the cabinet note will be made. Regulator recommendation for private trains. According to information received from sources, passenger trains will also be under the purview of the regulator. Freight is also possible to come under the purview of the regulator.

IRCTC ninth PSU to hit a market cap of Rs 1 Trillion

With hitting the market capitalization (m-cap) of Rs 1 trillion, IRCTC has become the ninth public sector unit (PSU) to join the privileged club. Earlier, PSU shares like State Bank of India, Coal India, NMDC Ltd, Indian Oil Corp Ltd, Power Grid Corp Ltd, SBI Life Insurance, Bharat Petroleum Corp and SBI Cards have achieved this feat.

Should you still buy IRCTC?

Most analysts tracking the IRCTC share still suggest a 'Buy'. Bloomberg says that the IRCTC stock, however, has surpassed the 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.

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