The Adani Factor: Exploring the potential influence on IRCTC revenue

On June 17, 2023, Adani Enterprise Ltd, in their regular filing to the exchange board declared that Adani Digital Labs Private Limited a wholly-owned subsidiary of the company has signed a Share Purchase Agreement for the proposed acquisition of a 100% stake in Stark Enterprises Private Limited also known as Trainman an online train booking and information platform. However, the company has not disclosed the cost of the acquisition. Everyone is talking about Adani taking over IRCTC. 

Let’s delve into the acquisition and assess how IRCTC can be affected. 

IRCTC a ‘miniratna’ under the Ministry of Railways, was established on September 27, 1999. Its mission is to enhance, modernize, and oversee catering, hospitality services, and tourism across railway stations, trains, and other sites. It offers budget hotels, exclusive tour packages, advertising, and a global reservation system, promoting domestic and international tourism.  

Approximately 14.5 lakh reserved tickets are booked daily in the Indian Railways, of which 81% are e-tickets booked through IRCTC. IRCTC has entered into partnerships with many agencies under schemes like B2B, EGovernance, B2C, etc., to complement its efforts in providing easy ticketing services to citizens, and there is no competition between IRCTC and its agents. Furthermore, B2C firms are specifically integrated with IRCTC’s business to directly provide reserved e-ticketing services to customers through their websites or mobile apps using IRCTC API. 

Trainman is one of the 32 B2C partners of IRCTC, contributing 0.13% of the total reserved ticketing. Its acquisition by any other agency will not alter the application of the existing B2C policy in any way. All integrations and operations will continue to be handled through IRCTC as they are. 

For the fiscal year ending March 2023, IRCTC reported revenue splits as follows: Catering 41.5%, Internet Ticketing 33.7%, Tourism 11.6%, Railneer 8.9%, and State Teertha 4.3%. On a standalone basis, the company’s net profit grew by 51.84%, from Rs 663.93 crore to Rs 1008.09 crore. Overall revenue increased by 87.36% compared to the previous fiscal year, reaching Rs 3661.90 crore from Rs 1954.48 crore.