Trainman contributes only 0.13% of total reserved ticketing. Adani’s takeover wouldn’t challenge IRCTC.
In light of Adani Group’s recent acquisition of Trainman, an online ticket-booking and information platform, a social media post claims that the purchase would result in strong competition for IRCTC from the Adani Group. The news is being shared in the current political context claiming that first Adani competes with IRCTC and eventually will take it over. Through this article, let’s fact-check the claim made in the post.
Claim: Adani’s takeover of trainman would result in strong competition for IRCTC.
Fact: IRCTC clarified that Trainman is one of the 32 authorized B2C (Business to Customer) partners of IRCTC, to which it provides its API services, contributing 0.13% of total reserved ticketing. Changing the stake won’t make any difference to this. All integration and operations will continue to be done through IRCTC. ICICIDirect, one of India’s largest retail brokers, has analyzed the business model of IRCTC and has opined that the real competition for the IRCTC is offline railway ticketing. Hence, the claim made in the post is MISLEADING.
Recently, through an exchange filing, Adani Digital Labs, a subsidiary of Adani Enterprises, announced its acquisition of Trainman. The acquisition was finalized through a share purchase agreement, enabling Adani Digital Labs to obtain a 100 percent stake in the online platform.
Following the takeover, social media is abuzz with claims that this would result in strong competition for IRCTC. Politicians like Congress MP Jairam Ramesh took to Twitter alleging that this will eventually lead to IRCTC’s takeover by Adani.
This deal would allow Adani enterprises to sell online train tickets from its platforms. However, contrary to the viral claims, this deal would not pose any challenge to IRCTC, as it almost has a monopoly in the online train ticket booking business.
Is Adani takeover a challenge to IRCTC?
Responding to such rumors, IRCTC, through a tweet rated the rumors as misleading statements. Further, it stated that ‘Trainman is one of the 32 authorized B2C (Business to Customer) partners of IRCTC. Changing the stake won’t make any difference. All integration and operations will continue to be done through IRCTC. It will only complement IRCTC and is not a threat or challenge to IRCTC.’
Further, IRCTC explained its business model in a filing after the media reported that Adani will compete with IRCTC. This filing highlighted that around 14.5 lakh reserved tickets are booked on a daily basis in Indian Railways, out of which 81% are e-tickets, booked through IRCTC. On the other hand, Trainman, contributing 0.13% of total reserved ticketing, is one of 32 partners of IRCTC to which it provides its API services.
IRCTC confirmed that Trainman’s acquisition by any other agency will not change the application of the extant B2C policy in any way. And has categorically mentioned that all the integrations and operations will continue to be done through IRCTC only as is being done presently.
ICICIDirect take on the controversy :
In light of the ongoing controversy ICICIDirect, one of India’s largest retail brokers, has analyzed the business model of IRCTC and has opined that the real competition for the IRCTC is offline railway ticketing. With only 40% online bookings in 2010-11, the percentage of online bookings increased to 80.5% in 2021-22, which indicates that the competition has gone down significantly.
Here, it is worth mentioning that according to the 2021-22 annual report, IRCTC makes only makes 54% of its money from tickets. As mentioned earlier, Trainman with only 0.13% of total reserved train bookings, contributes very less and doesn’t stand a chance to take over the IRCTC.
To sum it up, Trainman contributes only 0.13% of total reserved ticketing. Adani’s takeover wouldn’t challenge IRCTC.