The Indian Railway Catering and Tourism Corporation (IRCTC) share price on Friday soared to a 52-week high at Rs 2,727.95, up 6 percent intraday. This comes a day after the corporation announced the stock split decision. The company on Thursday informed that the board of IRCTC has approved the proposal to split 1 share of the face value of Rs 10 into 5 equity shares of the face value of Rs 2 each. In other words, if a share with a face value of Rs 10 is divided into 5, then its face value will be Rs 2.
A stock split means a company dividing its share price into some parts. After the implementation of IRCTC’s 1:5 stock split, for every 1 share held by a shareholder, it will become 5 shares.
IRCTC also informed that the proposal has been sent to the Ministry of Railways and other stakeholders for approval. The company said that the stock split will help in enhancing the liquidity in the capital market, expanding the shareholder base, and also enable small investors to get shares at affordable prices.
Even after the implementation of IRCTC’s 1:5 stock split, the authorized share capital would remain the same at Rs 250 crore, but the number of shares would increase from 25,00,00,000 to 125,00,00,000 (face value of Rs 2-each).
On Thursday, IRCTC also released the data for the June quarter of the financial year 2021-22. During April to June of the current financial year, the company has generated a profit of Rs 82.5 crore. It had sustained losses to the tune of Rs 24.6 crore in the same quarter last year. At the same time, the company’s income has increased by 84.8 percent.
IRCTC is a state-owned company that entered the primary markets by listing in October 2019. The government holds a 67.40 percent stake in IRCTC, which is the only authorized company allowed to manage catering services in Indian trains.