Shares of state-run Indian Railway Catering and Tourism Corp. Ltd (IRCTC), which was in the bull mode until over a week back, has slumped over 20% in the last five trading sessions after the Coronavirus outbreak created a stir in the markets.
The IRCTC shares were locked in a lower circuit of 10% on Wednesday, closing the day at Rs 1,565.40 apiece. The stock is now down 21.5% from its peak of Rs 1,995 touched on February 25, 2020, on BSE.
To recall, IRCTC shares, which got listed on stock exchanges on October 14, 2019, had surged nearly six times from its IPO (initial public offering) price of Rs 320 per share and were about to hit the Rs 2,000 levels before the recent correction began.
The IRCTC stock price began to drop last week after the coronavirus scare escalated in India and abroad. The travel and tourism industry took a major hit due to travel restrictions and cancelled trips, thereby impacting the railways stock negatively.
IRCTC is a wholly-owned subsidiary of Indian Railways, the only entity authorized by Indian Railways to provide catering services to railways and online railway tickets for trains in India. It also provides non-railway services including budget hotels, e-catering, and executive lounges.
Besides IRCTC, shares of airlines have also plunged in the last five days, with stocks like SpiceJet jet, InterGlobe Aviation Ltd (operator of India’s largest airline IndiGo) and Jet Airways India Ltd down 13-20% during the period.
Hotel stocks have also crashed. In the last five trading sessions, shares of Lemon Tree Hotels Ltd lost 16.5%, Indian Hotels Co. Ltd shed 11.4%, Oriental Hotels dropped nearly 12%, while EIH Ltd slipped 7%.
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