After asking Indian Railway Catering and Tourism Corporation (IRCTC) to share half of its revenue from convenience fee with the Ministry of Railways, the government has taken a U-turn on its decision. DIPAM Secretary Tuhin Kanta Pandey on Friday told CNBC-TV18 that the ministry has decided to withdraw its decision to take 50 percent of the ticket booking platform's revenue from the convenience fee.

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IRCTC shares were trading sharply off the lows it recorded earlier in the day after the decision of sharing convenience fee was conveyed by the company on Thursday. The stock plunged as low as 21 percent today after opening 10 percent lower.

However, it has recovered sharply, trading only 5.4 percent lower at Rs 864, at 11:53 am.

In a statement on Thursday, IRCTC said that the company was asked by the Ministry of Railways to share the revenue earned from convenience fee in the ratio of 50:50 with effect from November 1, 2021.

"It is to be informed that the Ministry of Railways has conveyed its decision to share the revenue earned from convenience fee collected by IRCTC in the ratio of 50:50 effective November 1, 2021," IRCTC had said in an exchange filing.

IRCTC charges a convenience fee for online bookings, which is one of the key revenue streams for the company. It fetched around Rs 620 crore in FY20.

Track IRCTC stock reaction here

(Edited by : Yashi Gupta)

First Published:Oct 29, 2021 10:58 AM IST