IRCTC shares crumble after being removed from ban list for futures and M&O options
Shares of the Indian Railway Catering and Tourism Corporation (IRCTC) came under intense selling pressure after the stock left the NSE’s ban list on futures and options on Monday. IRCTC shares fell 14.32% to an intraday low of Rs 3,960.05. The NSE places stocks under the list of prohibited futures and options when they cross 95 percent of the market-wide position limit. In accordance with the exchange rules, stocks on the ban list for futures and options can only be sold and no new buy orders can be placed for these stocks.
Meanwhile, Escorts, Indiabulls Housing Finance, Vodafone Idea, India Energy Exchange, Punjab National Bank and SAIL have been added to the list of futures and option ban stocks.
IRCTC shares posted profits after the sharp increase seen in the first 18 days of the current month; shares rose 68% from the closing price of 3,797 rupees on September 30 to an all-time high of 6,393 rupees on October 19, analysts said.
IRCTC shares have corrected 38% from record highs in three of the past five trading sessions.
IRCTC shares have been on investor radar after the company’s board of directors approved the stock split by a 1: 5 ratio in August. The IRCTC Board of Directors decided to split the shares in order to improve the liquidity of the capital market, broaden the shareholder base and make the shares affordable for small investors.
âIRCTC is one particular company that has a virtual monopoly on Indian railways. The amount of services it caters to is huge and there is no competition. The title can thus reach higher levels. There will be corrections, but long-term smart investors can buy in any trough, “Gaurang Shah of Geojit Financial Services told NDTV.
As of 12:55 p.m., IRCTC shares were trading down 10.72% at Rs 4,126, massively underperforming the Sensex which was up 0.36%.