Adani's Trainman acquisition not a threat to IRCTC: Here's why
Adani Digital Labs, a wholly owned subsidiary of Adani Enterprises, has entered the train ticket booking game. Last week, we found out that the company acquired Trainman, an online train booking and information platform. This news started rumors about how the new Adani venture would challenge the Indian Railway Catering Tourism Corporation (IRCTC). However, that's not the case. Here's why.
Why does this story matter?
The past few years have seen the Adani Group making moves in the travel space. Last year, the company launched Adani One, a one-stop destination for flight and cab booking. Prior to that, it acquired a minority stake in Flipkart-owned ClearTrip. The purchase of Trainman is touted as another step by the conglomerate to gain a significant foothold in the segment.
Trainman was last pegged at Rs. 80 crore
In a regulatory filing submitted before the National Stock Exchange (NSE), Adani Enterprises disclosed that it signed a share purchase agreement as part of its proposed acquisition of Trainman. The company is yet to disclose the financial details of the deal. Trainman was last valued at Rs. 80 crore. It was founded in 2016 by Vineet Chirania and Karan Kumar.
Rumors about Adani Group challenging IRCTC have started
Rumors became rife that Trainman's acquisition is Adani Group's play at the monopoly enjoyed by the IRCTC in the ticketing space. Opposition politicians came out attacking the move by the conglomerate. Jairam Ramesh, the general secretary of Congress Party said, "First competition with IRCTC, then takeover." However, Trainman's acquisition in no way enables Adani Group to challenge the IRCTC.
IRCTC's B2C partners do not have an independent existence
IRCTC has multiple business-to-customer (B2C) partners. In fact, 32 of them. The government-controlled company shares access and APIs with these B2C partners. Some of these partners include Paytm, MakeMyTrip, and Trainman (now part of Adani One). Passengers can use these platforms to book their train tickets. However, they need IRCTC user ID and password to do so. These platforms are not independent of IRCTC.
Trainman's service complements IRCTC
IRCTC called Ramesh's comment "misleading." According to the company, B2C partners like Trainman offers services that complement IRCTC. It added that they do not pose a challenge to IRCTC's operations. Trainman currently contributes 0.13% of the total reserved ticketing volume, IRCTC said. Adani Group's acquisition of Trainman will not change the dynamics. It will still need IRCTC to continue its operation.
