Akhil Vaani | From Railway Underdog To E-Commerce Powerhouse: The IRCTC Story

The story that unfolds in this piece is largely the untold story of the Indian Railway Catering and Tourism Corporation (IRCTC), the fifth-born PSU of Indian Railways, established on 27 September 1999.

From its very inception, IRCTC found itself sandwiched among many siblings—preceded by Rail India Technical and Economic Service Limited (1974), IRCON International Limited (1976), Indian Railway Finance Corporation (1986), and Container Corporation of India Limited (1988), and followed by RailTel Corporation of India Limited (2000) and Rail Vikas Nigam Limited (2003).

The Beginning

IRCTC was conceived as a subsidiary company of Indian Railways, with its registered office in Room No. 502, Rail Bhawan, Raisina Road, Delhi, in late 1999. This room was then occupied by the late S. K. Malik, who was the Executive Director of Tourism and Catering (T&C) at the Railway Board. With the formation of IRCTC, Malik became its first employee as Officer-on-Special Duty (OSD), and thus, the journey of the newly born corporation began.

Raison D’être

As the idea of IRCTC germinated from the Catering and Tourism Directorate of the Railway Board, so too was its original purpose. It began operations with a limited agenda, focusing on catering and tourism. The corporation’s objectives, as outlined in its Memorandum of Association, were:

1. Catering and Hospitality – To upgrade, run, and manage the catering and hospitality services of Indian Railways, either independently or through franchises or contracts with private entities.
2. Managing Hotels and Retiring Rooms – To oversee and market existing railway hotels, Rail Yatri Niwas, and retiring rooms, as well as develop new ones, either independently or through public-private partnerships (PPP).
3. Promoting Tourism – To promote domestic and international tourism in general, and rail-based tourism in particular, with an emphasis on developing tourism infrastructure on a nationwide scale by stimulating investment and growth in rail-related tourism.

From this modest beginning, IRCTC has grown into India’s most successful e-commerce platform and a household name. In the process, it has not only come of age but also carved out a niche for itself.

Coming Of Age

Earlier this month (on 3 March 2025), the Department of Public Enterprises (DPE), Ministry of Finance, announced IRCTC’s elevation to Navratna status through a post on X (formerly Twitter). The announcement stated that IRCTC’s annual turnover was Rs 4,270.18 crore, with a profit after tax (PAT) of Rs 1,111.26 crore and a net worth of Rs 3,229.97 crore in FY 2023-24. IRCTC thus became the twenty-fifth Navratna PSU of India in twenty-five years of its existence.

To put this into perspective, Navratna corporations are the second tier of central government-owned ‘Ratna’ companies, positioned between the Maharatnas and Miniratnas, based on criteria such as profitability, net worth, earnings, and inter-sectoral performance. Earlier, in May 2008, IRCTC was classified as a Miniratna public corporation.

A Diversified Corporation

Today, IRCTC is a diversified corporation with its footprint in four distinctly different business portfolios:

• Catering – 45.6 per cent of revenue
• Internet Ticketing – 30.3 per cent of revenue
• Tourism and Travel – 16.4 per cent of revenue
• Rail Neer (Packaged Drinking Water) – 7.7 per cent of revenue (FY 2023-24)

I submit that numbers tell only part of IRCTC’s success story.

A Wonder Kid

The biggest success story of IRCTC is its website, www.irctc.co.in, which has emerged as one of the most transacted websites in the Asia-Pacific region. It operates as a major e-commerce platform for online railway ticket booking and related services.

Who could have imagined in the year 2000 that a newcomer—a wonder kid—would disrupt the system, wrest power from railway reservation clerks and reservation centre touts, and empower ordinary citizens to book rail tickets from the comfort of their homes, while walking, or even on the go with a single click—either through the IRCTC website (www.irctc.co.in) or its Rail Connect mobile apps (available on Android and iOS)?

These two platforms accounted for 82.68 per cent of the total reserved tickets booked on Indian Railways in FY 2023-24. On average, 12.38 lakh tickets were sold daily through IRCTC’s website and mobile app during that period. The site offers round-the-clock ticket booking services, except for a 35-minute break from 23:45 hrs to 00:20 hrs.

I will discuss this story soon. For now, it is time to tell the story of how IRCTC became what it is today—despite the mandarins of Rail Bhawan at Raisina Hills, not because of them.

Despite And Not Due To Railways

As an outsider-insider of Indian Railways, I have no hesitation in stating that IR is a unique entity—it creates offshoots but often either abandons them (IRSDC, now mothballed, is a prime example) or actively stunts their growth (this is the untold story of IRCTC). The Railways did its best to ensure that IRCTC had a short shelf life or survived on one leg. Here are two instances of Indian Railways trying to derail IRCTC’s very existence:

Catering

Catering is the bread and butter of IRCTC, accounting for nearly half (45.6 per cent) of its turnover. In fact, IRCTC was conceptualised during the NDA government led by Atal Bihari Vajpayee as prime minister, with Nitish Kumar and Ram Naik as railway ministers, specifically to substantially improve catering services at railway stations and on running trains.

It took over five years (2001–2006) for IRCTC to gradually take over the catering business from zonal railways and establish its presence. Then came a sudden jolt. Mamata Banerjee, one of the four railway ministers in the UPA-II government, delivered a body blow by stripping IRCTC of its core function—the catering portfolio.

Under the 2010 catering policy implemented by the Ministry of Railways, mobile catering services, including base kitchens, were taken away from IRCTC. The policy directed the Railway Board to set the menu and tariff for standard meals, breakfast, tea, coffee, and catering charges, while zonal railways were made responsible for fixing the menu and pricing for other items, including à la carte options and Jan Ahar outlets. As a result, IRCTC was reduced to merely managing food plazas, food courts, and fast-food units.

Redemption came only after seven long years—but with strings attached. On 27 February 2017, during the tenure of Suresh Prabhu, the railway minister in the first term of the Narendra Modi government, the New Catering Policy 2017 was notified. This policy reinstated IRCTC’s responsibility for the entire catering services across Indian Railways. Additionally, IRCTC was directed to unbundle catering services, creating a distinction between food preparation and food distribution, and to establish 10 more IRCTC-operated, mechanised base kitchens to ensure a fresh and hygienic food supply on trains.

E-Ticketing

When IRCTC was first launched, rail ticketing was not part of its domain. The truth is, it had nothing to do with railway reservations. At the time, reservations were exclusively controlled by railway reservation clerks and touts loitering near reservation counters. Getting a reserved railway ticket was an ordeal—reservation seekers had to stand in endless queues for hours at cramped and uncomfortable railway reservation centres, whether for PRS (computerised reservations) or manual (non-computerised) bookings.

The emergence of e-ticketing (originally I-ticketing) at IRCTC can be credited to the convergence of three Indian Railways officers, all from the Indian Railway Traffic Service (IRTS)—M. N. Chopra, the first managing director of IRCTC; Amitabh Pandey, the first group general manager (IT Services), IRCTC; and R.K. Thoopal, then member, traffic, Railway Board, in 2001.

Chopra and Pandey’s vision and enthusiasm were so compelling that, in a rare departure from its usual bureaucratic lethargy, the Railway Board approved the online ticketing pilot project within a week of their presentation—a decision made at lightning speed.

At the time, IRCTC was just a two-year-old startup, and irctc.co.in was a startup within the startup.

When IRCTC launched online ticketing in August 2002, it booked just 27 I-tickets on the first day. Initially, I-tickets were physically delivered to customers by courier agencies. In 2005, IRCTC introduced e-ticketing, and with the mainstream adoption of digital bookings, I-ticketing was eventually phased out.

Railway Board Spikes Again

During the tenure of railway ministers Mamata Banerjee and Mukul Roy in the second UPA government led by Manmohan Singh, the Railway Board came up with the idea of developing its own online reservation platform—an apparent attempt to derail IRCTC’s online ticketing business. An undisclosed sum was spent over two years (2010–2012), and multiple trials were conducted. To the best of my knowledge, it took the reformist railway minister Dinesh Trivedi to abort this misstep.

The rest is history.

Over the past 20 years, IRCTC has emerged as one of the largest e-commerce websites in the Asia-Pacific region. Its e-ticketing system was upgraded to the Next Generation E-Ticketing (NGeT) System in 2024, significantly increasing its ticket issuance capacity. Supported by high-capacity servers, the NGeT system can now book more than 26,000 tickets per minute.

Beyond Catering And E-Ticketing

Catering and e-ticketing are not the only success stories of IRCTC. By successfully operating tourist trains and running two Tejas Express trains—the first privately operated trains on the Indian Railways network—IRCTC has demonstrated that private players, too, can efficiently run train services. This is precisely the model needed today, but it has failed to take off due to the railways’ inconsistent policies.

A Market Leader

IRCTC’s Initial Public Offering (IPO) was launched on 30 September 2019, with a price band of Rs 315–320 per share. When it was listed on the NSE and BSE on 14 October 2019, it opened at Rs 644 per share—a 101 per cent premium over the issue price. Within two years of listing, IRCTC’s market capitalisation crossed the Rs 1 lakh crore mark before hitting the 15 per cent lower circuit.

IRCTC became the ninth Central PSU—and the first railway PSU—to achieve this milestone, joining the elite club of State Bank of India, Power Grid Corporation, Indian Oil Corporation, Bharat Petroleum Corporation, NTPC, SBI Cards, and others.

Killing The Golden Goose

Over the years, IRCTC has significantly reduced Indian Railways’ operating expenditure through its catering and online ticketing operations.

Yet, one day, Indian Railways decided to kill its golden goose.

Within a month of IRCTC’s market capitalisation crossing Rs 1 lakh crore, the Railway Board, on 29 October 2021, announced that IRCTC would be required to share 50 per cent of the revenue earned through the convenience fee levied on ticket bookings made via its platform. The announcement triggered chaos in the stock market. IRCTC shares, which were trading at an all-time high of Rs 1,279, plummeted by 50 per cent on the same day, dropping as low as Rs 657.

In a ripple effect, shares of other PSUs also tumbled. It took the personal intervention of Prime Minister Narendra Modi to get the Railway Board’s orders reversed. But the damage had been done. Today, IRCTC’s shares stand at Rs 719—a sharp decline from their lifetime high of Rs 1,290 on 29 October 2021—despite the company’s steady improvement in business performance.

The big lesson Indian Railways has yet to learn is this: it cannot have the cake and eat it too.

The author is multidisciplinary thought leader with Action Bias, India-based international impact consultant, and keen watcher of changing national and international scenarios. He works as president advisory services of consulting company BARSYL. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect News18’s views.