After hitting a record high in early trades, shares of Indian Railway Catering and Tourism Corporation (IRCTC) saw a dramatic drop of Rs 1,400 to close to 4,995 per share in Tuesday's trading session.
The stock ended the day at Rs 5,363 per share, down more than 8%. IRCTC shares hit a new high of Rs 6,393, up more than 7%, with the company's market capitalization topping $1 trillion in early trading.
During the lifting of travel restrictions across states following the second wave of the Covid-19 outbreak, the IRCTC stock has been on the rise. It has also risen sharply after the August announcement of the stock split proposal.
On August 12, the IRCTC board of directors approved a 1:5 stock split to increase capital market liquidity, broaden the shareholder base, and make shares more affordable to small investors.
The state-owned firm debuted on the primary markets in October 2019 and now holds a monopoly. In the rail network, it enjoys a 100 percent market share. It's also the only company with the authority to run catering services on trains and at major railway stops.
IRCTC's stock price has increased by nearly 1,700 percent since its IPO, from Rs 320 per share to Rs 6,000 per stock. The multibagger stock is up roughly 245 percent so far this year, after rallying 275 percent in the previous year.
The eight public sector firms to reach the 1 trillion m-cap mark before IRCTC are State Bank of India (SBI), Coal India, National Mineral Development Corporation (NMDC), Indian Oil Corporation (IOC), Power Grid, SBI Life Insurance, Bharat Petroleum, and SBI Cards