IRCTC,
Indian Railway Catering and Tourism Corporation, became the top 100 most
valuable listed companies’ club after the transport services firm’s stock hit a
new high of Rs 3,041.20, going up 6% on the BSE in intra-trade day on Monday.
The IRCTC stock has rallied from its low of Rs 1,541 on April 19. IRCTC’s
market capitalisation (m-cap) stands at Rs 48,213 crore on Monday morning.

The
state-owned transport services company surpassed Colgate-Palmolive (india),
Cholamandalam Investment and Finance Company, Hindustan Aeronautics Limited (HAL),
Balkrishna Industries, ACC and Bandhan Bank.

The Indian
Railway Catering and Tourism Corporation is the only agency authorized to
provide catering services to railways, online railway tickets and packaged
drinking water at railway stations and trains in India. IRCTC dominates online
train ticket bookings with 73% of the share and packaged drinking water with
45% of the share.

The rally
in IRCTC’s stocks follows the IRCTC board approving a stock split in 1:5 ratio
to enhance the firm’s liquidity in the capital market as well as to widen the
shareholder base and make the shares available to small investors. The IRCTC
board split one equity share of the company at a face value of Rs 10 into five
equity shares at a face value of Rs 2 each. This is subject to approval of the
Ministry of Railways.

Usually, a
stock split is done in order to make a stock more affordable for small retail
investors and improve liquidity. Stock splitting refers to splitting the face
value of shares of companies, wherein the number of shares of the company
increases but the market cap remains the same. Therefore, existing shares
split, but the underlying value remains the same. The number of shares
increases, the price per share decreases.

In order to
further boost revenue, IRCTC is now planning to launch adventure tour packages
and give emphasis on customised tour packages, especially for small groups.