The IPO market is again abuzz and as of now while over 100 companies have applied their DRHP for market regulator's approval, a number of them will likely hit the markets by the end of this financial year 2022. Interestingly, regardless of the market momentum, the one factor that promises good returns for IPO investors over the term of investment is the stocks' fundamentals and this has what has played in the outstanding performance of the stock that we are listing out here for its phenomenal gains in just 2 years time.
IRCTC -listing 2 years back
The Indian railways catering company y made its debut 2 years back in the month of October. Against the issue price of Rs. 320, the stock is trading with gains of 1600 percent at a price of Rs. 5464 apiece on the NSE.
Why the recent gains?
The stock's recent gains are to do with the stock split which its board approved in the ration of 1:5. The move has been to fuel more liquidity into the stock, allow for more investors into it. The board decided to 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 the approval of the Ministry of Railways.
With the stock split, the number of shares are increased that in fact is aimed at making the stock more affordable for retail investor class.
What lies ahead for IRCTC stock?
The uncharted plans of the catering and ticketing company of the Indian Railways such as its plans of coming up with adventure tour plans as well as customer-specific plans will enable the company to gain more revenue share.
Also, the recent spur in train ticket booking on account of easing of coronavirus situation in the country will be reflected in the company's earnings due to be revealed on October 14, 2021.
Thus looking at all such scenarios, the stock is expected to hit a new high of Rs. 5800 in the short term.
Echoing with Avinash Gorakshkar's views; Ravi Singhal, Vice Chairman at GCL Securities said, "IRCTC is aggressively focusing on its hospitality business. It is making fresh tie-ups with hotels, tour and travel service providers and local food suppliers. IRCTC is also giving special focus to its food chain business in running trains. Apart from this, IRCTC has made tie-ups with aviation companies as well. So, market has reaslised that in coming times, it is no more going to remain an Indian Railways' e-ticket booking platform. It will emerge as A to Z hospitality service provider."
Advising fresh investors to buy at current levels; Sumeet Bagadia, Executive Director at Choice Broking said, "IRCTC shares have strong support below Rs. 5000 levels. Those who have this stock in their portfolio should continue to hold the counter maintaining trailing stop loss at Rs. 4950 as it may go up to Rs. 5500 to Rs. 5800 in immediate short term. One can take fresh position in the counter at current levels maintain stop loss at Rs. 4950."