IRCTC share price up 197% from issue price; what now for those who want to buy

The IPO received bids for 225.39 crore shares as against the issue size of 2.01 crore shares.

Shares of Indian Railway Catering & Tourism Corporation (IRCTC) that made a stellar debut earlier this month, are on an upward trajectory, recording one of the best stock market listings in recent times. Hitting a high of Rs 953.50 on NSE Thursday, the IRCTC stock is up 197 per cent from the issue price of Rs 320. On the listing day itself on October 14, the stock had surged 127.4 percent to close at an intraday high of Rs 727.75 amid robust buying interest from investors. The stock listed at Rs 644. IRCTC shares are trading at Rs 914.80, up 14.50, or 1.6 per cent on NSE at the time of reporting.

Considering the monopoly of the Indian Railways in the catering and tourism business, the stock is expected to do well going ahead, Abhimanyu Sofat, Head of Research, IIFL told Financial Express Online. “The market cap of IRCTC is now above $2bn led by strong interests from investors driven by expected robust outlook by the company. The profit of the company is expected to zoom now led by the internet handling charging which is being levied from September. A monopoly business with strong cash flow will ensure elevated multiples for the company. We feel that interested investors should look at the price of Rs. 750 to buy the stock,” he also said.

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However, there are some analysts who hold the opposite opinion on the IRCTC stock. Even though the stock price is on a rise, buying of IRCTC stock could be avoided considering the current valuations are not too attractive, investment advisor Sandip Sabharwal told Financial Express Online. “The stock movement is more due to limited floating stock and no big sellers. Valuations are no longer attractive and investors should largely avoid buying at this stage,” he added.

Meanwhile, on the last day of bidding, IRCTC IPO was subscribed to about 111.80 times. The IPO received bids for 225.39 crore shares as against the issue size of 2.01 crore shares.