NEW DELHI: Amid falling share prices, IRCTC on Wednesday said that the stock movement is a market phenomenon and the operations within the company are normal. “Stock movement is pure market play. There is no such development with the company that is impacting its value,” an official with the IRCTC told TNIE.
Shares of IRCTC nose-dived 17% on Wednesday and 31% overall from Tuesday’s record high of Rs 6,393, taking investors by surprise. Many analysts said the stock was due for some correction after a strong rally in which it had rallied over 290% in the last six months. The scrip plunged 17.34% to close at Rs 4,432.95 after NSE banned the trading in its F&O segment.
Investors who have invested in IRCTC have lost about Rs 30,000 crore over the past two days as m-cap of the state-run enterprise has reduced to around Rs 71,000 crore, after crossing the `1 lakh crore-mark during trade hours on Tuesday.
Experts say the fundamentals of the stock are still intact, and the correction came on the back of its overvaluation. Santosh Meena, Head of Research, Swastika Investmart, said, “It had become very easy for the traders to make easy money every day and we know that the market is not charitable enough to make you easy money every day, therefore, we are seeing a sharp correction in this counter to take out accesses. There is some buzz that government may also dilute some stake to get the benefit of the recent rally in this counter.”
He added, “Technically, it is trading near to its 20-DMA (day moving average) of `4,400 and if it manages to hold this level then we can expect a bounceback from here. Otherwise, we can see further downside where Rs 4,000-3,800 will be a critical demand zone to take fresh buying positions.”
Yash Gupta, Equity Research Analyst at Angel One, said, “We have seen a sharp selloff in the broader market in the last two days and many stocks such as IRCTC, IEX, Tata Motors, Tata Power and Deepak Nitrite corrected sharply during the period.” He suggested retail investors to avoid buying on dips kind of strategies, “as we are seeing selling pressure in the broader market”.
