The Ministry of Railways on Friday said that it has decided to withdraw the decision on Indian Railway Catering and Tourism Corporation (IRCTC) convenience fee. This comes a day after IRCTC said that it has been asked to share 50% of its revenue earned as convenience fee from bookings on its website.
“Ministry of Railways has decided to withdraw the decision on IRCTC convenience fee,” DIPAM Secretary announced in a tweet. The online ticketing arm of Indian Railways on Thursday informed the exchanges that it was asked to share 50% of its revenue earned as convenience fee from bookings on its website with the national transporter, an arrangement that had been discontinued since the pandemic.
Convenience fees charged from customers generated a sizable revenue for both IRCTC and the Railways. The fee is not part of the rail fare. It is for the service of online ticket booking offered by the IRCTC.
IRCTC shares rebounded, though trading in the negative territory, as the stock was down 4%. The stock had declined 25% in Friday's early deals after the news of sharing half of its revenue from convenience fee with the government.
"It was a roller coaster ride for the IRCTC where it fell around 25% in the morning session but reversal of government's decision led to a short-covering in the counter. I believe the stock will remain sideways in the coming days where the upside will be capped around 1000 level and the downside will be protected around 700 level," said Santosh Meena, Head of Research, Swastika Investmart.
