IRCTC shot itself in the foot yesterday when it decided to share 50% of the convenience fee it earns with the Indian Railways.
The convenience fee is a major money-spinner for the company.
Also, what needs to be remembered here is that IRCTC doesn’t have to spend much money to earn this revenue, with most passengers who want to book tickets almost automatically logging on to www.irctc.co.in to do the same.
In comparison, this morning, the company’s market capitalization or the total value of its shares, fell by ₹18,272 crore or around ₹18k crore.
That’s a fall of close to ₹18k crore, for a gain of ₹150-200 crore, or a hundred rupee lost for a one rupee gain.
And at the same time, the overall expenditure of the company will continue to remain the same.
A simpler way to go earn ₹150-200 crore for the government would have been to sell IRCTC shares worth ₹150-200 crore and increase the budget of the Indian Railways by that amount.
Of course, over time, IRCTC can increase the convenience fee per ticket and restore its revenue.