Better sense prevailed and it was a good decision by the DIPAM secretary to very categorically say that railways is going to withdraw their decision to share IRCTC convenience fee?
I definitely think so. The fact is that after the OFS, if there are any critical steps that investors need to know, that should have been clarified. It would not have gone right if overnight the government came up with ideas where a large part of the revenue will be given away to a group entity. Though the government is a promoter, keeping in mind the fairness and the interest of the minority shareholders, it should have been dealt with in a much better way. But if there is a reversal of that sharing arrangement, definitely it will be taken positively by the market.
This is also a matter of messaging. Traditionally this is exactly why investors have shied away from PSU stocks. IRCTC was a benchmark, completely breaking away from the traditional PSU performers and it had given investors handsome returns. So has the rolling back of the 50% revenue sharing decision sent the right message not only to minority shareholders but even from a global or DII participation?
Absolutely I think the government has been the biggest beneficiary of the entire rerating that has happened across PSU names partly because of the divestment progress, partly because of the way the government has gone about Air India divestment and there is definitely a sense that this government is out there to clean up the legacy issues and go ahead in terms of privatisation. In such a situation, the initial announcement of the railway ministry had given a huge blow and rattled investor sentiment. I am really surprised by the fast response that the government has shown to address investor concerns.
That is telling us that this government is far more quick when it comes to correcting any decisions that they have taken which are not taken by investors in the right way.
