FPIs, MFs book profit in IRCTC; cut stake during March 2020 quarter

Topics IRCTC | Buzzing stocks

Institutional investors, led by foreign portfolio investors (FPIs) and mutual funds (MFs), have booked profit in shares of state-owned travel support services company Indian Railway Catering and Tourism Corporation (IRCTC) by trimming their stake by over three percentage points in the March quarter.

According to latest shareholding pattern data, total institutional holdings in IRCTC declined to 3.86 per cent as on March 31, 2020. They held 6.91 per cent stake in the company at the end of December 2019 quarter. MFs' stake has more than halved from 4.78 per cent to 2.05 per cent, while that of FPIs has dipped to 1.7 per cent from 1.99 per cent earlier, data shows.

On the other hand, individuals / public accumulated the shares of IRCTC during the quarter. They increased their stake to 7.05 per cent in March quarter from 3.98 per cent in December quarter. As many as 192,838 new individual shareholders bought the shares of IRCTC during the quarter. There were 138,807 retail investors in previous quarter, which increased to 331,644 at the end of March quarter.

In first two months of the current calendar year 2020, IRCTC saw a strong run-up at the bourses and moved up over 100 per cent from Rs 934 to Rs 1,995 on February 25, 2020, against 2.4 per cent decline in the S&P BSE Sensex during the same period. It zoomed 523 per cent as against its issue price of Rs 320 per share on the BSE.

IRCTC had also entered the list of top 100 companies with the highest market capitalisation. The company made stock market debut on October 14, 2019.

Big hit

The decision by the Indian Railways to stop passenger services further till May 3 is set to wipe out the national transporter’s ticket earnings and a huge share of the IRCTC’s revenue through service charge. As per estimates, around 80 per cent of the tickets booked by the railways is through the IRCTC online platform.

However, analysts at YES Securities like the stock from medium-term perspective due to its monopoly position, RoE (return on equity) of 45 per cent, strong balance sheet, healthy dividend payout & robust free cash flow generation on consistent basis.

At 10:11 am today, IRCTC was trading 3.3 per cent higher at Rs 1,292 on the BSE. It has recovered 58 per cent from its February low. A combined around 900,000 shares have changed hands on the counter on the NSE and BSE so far.

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