Tuesday, October 19, 2021

IRCTC witnessed a sudden slump of ₹1,400 | STOCK SPLIT CANDIDATE | WHAT NOW?

  


Shares of Indian Railway Catering and Tourism Corporation (IRCTC) witnessed a sudden slump of 1,400 or 15% towards close to 4,995 per share in Tuesday's trading session after hitting a record high in early deals. The stock closed at 5,363 apiece, down more than 8%. IRCTC shares had hit a record high of 6,393, gaining over 7% with its market capitalization crossing 1 trillion in early deals.


IRCTC had entered the primary markets by listing in October 2019 and enjoys a strong monopoly. It has 100% market share in rail network. It’s also the only entity authorised to manage catering services on trains and major static units at railway stations.

Since August, the market price of IRCTC has more than doubled  after the company on July 30, 2021, announced a stock split plan. On August 12, 2021, the board of IRCTC approved a stock split in the ratio of 1:5 to enhance the liquidity in the capital market, widen the shareholder base and make the shares affordable to small investors.


IRCTC has fixed October 29, 2021, as the record date to ascertain the name of shareholders entitled for subdivision/split of equity shares of Rs 10 each into five (5) equity shares of the face value of Rs 2 each. The scrip will turn ex-date for stock split on October 28, 2021.


WHAT NOW?

Now the stock touched the peak of the recent sharp rally which was started due to the stock split news. Now the stock will trade in the range of 5500 - 4500 . 

So the trader and short term investor should follow sell of rise strategy and exit.

Long term investor should hold and still no need to worry due to this volatility in the stock . Stock will take some time here and will consolidate here for 1- 3 months  and after consolidation again upside rally will continue.


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