The History of IRCTC: From Public Sector Undertaking to Market Leader

In this article, we will discuss:

• IRCTC: The Origin
• Early Challenges
• The e-Ticketing System: IRCTC’s Earliest Milestone
• Expanding Horizons with Catering and Tourism
• The IRCTC IPO: A New Chapter in the Company’s History
• IRCTC’s Share Price History: Looking Back at What the Stock Has Delivered 
• What Does Recent IRCTC Share Price History Tell Us?

Indian Railway Catering and Tourism Corporation (IRCTC), which is India’s largest and only state-owned railway ticketing company, is a household name across the country. Whether you consider people who book their train tickets online or those who prefer in-person booking, there’s nobody who has not heard of India’s mammoth railways ticketing services provider. Yet, despite its noticeable presence today, IRCTC’s history can be traced back to humble beginnings. 

IRCTC: The Origin

A look back at IRCTC’s history reveals that the company was established in September 1999 as a public sector undertaking ( PSU). It was completely owned by the Indian government and was set up to professionalise and upgrade the catering and hospitality services provided at various Indian railway stations, on the trains that passed through, and other associated locations. 

As its name indicates, IRCTC was also established to promote domestic and international tourism through the development of budget hotels, special tour packages and information publicity. This initiative was part of a larger move to make the Indian Railways more customer-centric and commercially viable.

Early Challenges

IRCTC’s history reveals that the company faced several roadblocks in the initial years after it was founded. Tasked with the responsibility of streamlining the ticketing procedures for India’s mammoth railway network, the company’s primary challenge revolved around modernising the booking system, which was entirely manually operated at the time. 

This challenge was accompanied by other complications like streamlining the vast and varied catering services offered across the Indian railway network. At that point in the IRCTC’s history, there was a pressing need for an efficient and transparent system to cater to the growing number of railway passengers.

The e-Ticketing System: IRCTC’s Earliest Milestone

The first milestone in IRCTC’s history occurred within a few years after it was set up as a public sector undertaking. On August 3, 2002, IRCTC launched the online ticketing system for Indian Railways. This digital innovation marked a shift in how railway tickets were booked — bringing in the transformation from traditional counter bookings to a more accessible online platform. 

The launch of the IRCTC website revolutionised the ticket booking experience and brought in the elements of convenience and flexibility to millions of travellers. Today, tickets can be reserved on the IRCTC platform via the company’s website or its mobile application.

This early milestone in IRCTC’s history was followed by a string of other revolutionary accomplishments, some of which are listed below. 

• 2011: IRCTC introduced Shubh Yatra, a loyalty program through which frequent travellers could pay an upfront subscription fee and avail discounts on tickets
• 2012: To further streamline the process of ticket reservations, IRCTC launched the Rolling Deposit Scheme (RDS), a kind of wallet through which customers can book tickets using the funds deposited.
• 2013: IRCTC added hotel and flight booking services to its array of online reservation procedures. 
• 2016: To make ticket bookings more efficient, the company launched a lighter version of its reservation portal that functioned smoothly even on devices with low-speed internet connectivity.
• 2019: IRCTC introduced iMudra, a payment wallet through which users can reserve tickets and receive or send money.
• 2021: The company introduced a new facility through which users could recharge their smart cards on the UTSonmobile platform and book unreserved train tickets offline or online.

Expanding Horizons with Catering and Tourism

While e-ticketing became a flagship service, IRCTC’s history reveals that the company did not rest on its laurels. It expanded its portfolio to include onboard catering services and packaged drinking water (Rail Neer). The introduction of e-catering services allowed passengers to order food from a variety of cuisines, thereby enhancing the travel experience on Indian Railways.

The company’s expansion to provide catering services also saw pantry cars being attached to trains that serviced medium and long-distance routes. Furthermore, cafeterias and food plazas were also set up at many major railway stations across India. 

In addition to its new range of catering solutions, IRCTC also ventured into the tourism sector. Initially, this arm of the railway ticketing service provider focused on organising budget-friendly tour packages primarily for domestic travellers. Later, as interest in travel grew, IRCTC recognised the diverse interests and preferences of travellers and diversified its portfolio to include specialised tours such as heritage tours, religious pilgrimages, adventure expeditions and wildlife safaris. 

The IRCTC IPO: A New Chapter in the Company’s History

No account of IRCTC’s history is complete without discussing its historic Initial Public Offering (IPO). The company’s listing was a pivotal milestone in its growth from one of the many PSUs in India to a stellar market leader. 

IRCTC issued its shares to the public in 2019, two decades after it was established as a public sector undertaking. Bidding for the shares offered in the IPO opened on September 30, 2019 and closed on October 3, 2019. Thereafter, the company’s shares were listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) on October 14, 2019.

Here are some key facts about the IRCTC IPO, which was the top performing public issue in 2019.,

• The size of the issue was over ₹640 crores and the issue price was fixed in the band of ₹315 to ₹320 per share.
• The issue was oversubscribed 112 times, meaning that the company received bids worth over ₹72,200 crore. 
• Even the shares reserved for IRCTC’s employees were oversubscribed 6 times. 
• IRCTC’s shares were listed at ₹644 on the BSE, translating to a listing premium of over 101% over the issue price. 
• On the NSE, the company’s shares were listed at a premium of over 95%, at ₹626. 
• IRCTC’s listing was the best-performing issue in the 2 years preceding the year of the IPO. 

IRCTC’s Share Price History : Looking Back at What the Stock Has Delivered 

IRCTC’s share price history may be only a little over 4 years old (as of February 2024), but in this short duration, the stock has hit some excellent highs and delivered multibagger returns. Here are the salient points in IRCTC’s share price history and how the company has performed over the past 4+ years. 

• Over the 3-year period ending December 2023, the stock delivered multibagger returns of over 200%.
• On October 28, 2021, the company carried out a stock split in the ratio of 1:5, due to which each IRCTC share with a face value of ₹10 was split into 5 shares with a face value of ₹2 each. 
• In the pre-split phase of IRCTC’s share price history, the company hit a record high of ₹6,393 on October 19, 2021. Its highest daily increase during this period was 14.26%, while its greatest one-day fall was -17.34%.
• In the post-split phase of IRCTC’s share price history, the shares hit a record high of ₹1049.75 on January 23, 2024. During this period, its highest daily jump in price was 12.57%, while its maximum one-day dip was -9.32%.

What Does Recent IRCTC Share Price History Tell Us?

At the start of February 2024, IRCTC’s share price rose by over 1.50% as the Sensex rallied. Over the course of the month, the stock continued to perform well and even rebounded by over 70% from its earlier 52-week low. However, as February drew to a close, the company’s shares dipped by more than 2% even as the Sensex fell. It remains to be seen how IRCTC’s share price will change over the coming months. While temporary price fluctuations such as these are not uncommon, there’s no denying that in the long run, IRCTC has truly emerged as a market leader from its humble beginnings as a PSU. 

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