Life Insurance Corporation of India (LIC) has increased stake in Indian Railway Catering and Tourism Corporation (IRCTC). The Indian Railways PSU informed the Indian stock market exchanges about the development and said the insurance behemoth has increased its stake in IRCTC to 7.278 per cent from the current 5.005 per cent. LIC increased its stake in IRCTC after adding 1,81,80,323 IRCTC shares to its portfolio, making it a total of 5,82,22,948 IRCTC shares. LIC acquired these additional shares of IRCTC through open market purchase from October 17 to December 16, 2022.
Asked whether LIC’s buyout of IRCTC is a signal to retail investors, Rajesh Sinha, senior research analyst at Bonanza Portfolio, said, “Capacity expansion of Rail Neer plants, addition of new trains, increase in convenience fee and payment of Rs. With the provision of aggregator services, IRCTC revenue is expected to grow in the long term. Given IRCTC’s market dominance, development plan and government’s focus on the railway sector, IRCTC’s growth outlook looks promising and investors are looking for long-term potential investments. may consider.”
“Technically, 660 is an important support level for the counter, and if it manages to hold this level, we can expect a bounce back as the RSI is also in the oversold zone. Although, 700-725 will continue to be a key supply area that it needs to surpass in order to gain any meaningful strength. Downstairs, if it slips down 660 level, so expect more pain,” said Santosh Meena, head of research Swastik Investmart,
IRCTC, a wholly owned subsidiary of the Indian Railways, is authorized to provide certain services to the Indian Railways including online ticketing, catering and sale of drinking water on trains and at railway stations. Currently, IRCTC books about 1.1 million tickets on an average a day, and in terms of catering, it serves over 35,000 meals per day.
Rail Neer (Drinking Water) segment also crossed its highest revenue of pre-pandemic period with better capacity utilization of its plants. Currently, IRCTC has Rail Neer capacity of 1.55mn bottles per day (mbpd) and is commissioning 2 new plants to take the total Rail Neer capacity to 1.75mbpd by the end of FY23E and 1.84 by the start of FY24E mbpd is doing. Under catering services, IRCTC currently has 450 trains with pantry cars while trains with side vending are 715. It has a tender to add 200 more trains which is in the pipeline.
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