The Union Ministry of Railways on Friday decided to withdraw its decision seeking 50% of revenue earned from convenience fee collected by the Indian Railway Catering and Tourism Corporation. The decision was taken after the company’s shares plunged during the morning trade.
The IRCTC is the only company that is authorised to handle food services on trains. It is also the only firm that controls the online ticketing and catering system for the Indian Railways.
In a Sensex filing on Thursday, the IRCTC had said that the railways ministry had asked it to share half of the revenue from next month.
The convenience fee that is charged from passengers is a sizeable part of the revenue generated by the railways. This fee is not a part of the railway fare as it is collected for the online ticket facility offered by the IRCTC, according to the Mint.
On Friday morning, the IRCTC stock opened at Rs 822.40 on the Sensex, recording a 91.35 points fall from the previous day’s closing of Rs 913.75.
In the intra-day trading, IRCTC share prices crashed, recording a low of Rs 650.10. But, the shares began to recover slightly, showing an upward trend around 10.30 am, closer to the ministry’s announcement.
The IRCTC share prices have been trading in the Rs 800-bracket since the announcement. As of 1.50 pm, the shares were trading at Rs 859.20 on the Sensex.
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