IRCTC has disclosed that it has been fined by both BSE Limited and National Stock Exchange of India Limited for non-compliance with board composition requirements under SEBI regulations. The penalties were imposed for violations during the quarter ended December 31, 2025, highlighting ongoing governance challenges faced by the government-owned railway catering and tourism company.

Fine Details and Non-Compliance Issues

The company received notices from both stock exchanges on February 27, 2026, regarding the imposition of fines for failing to comply with Regulation 17(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The specific violation pertains to the composition of the Board of Directors, including the failure to appoint a woman director as mandated by regulatory requirements.

Company's Response and Justification

IRCTC has clarified its position regarding the board composition issues, emphasizing the unique constraints it faces as a government company. The company has explained that the power to appoint Directors, including Independent Directors, on its Board vests with the President of India, represented through the Ministry of Railways, Government of India.

The management has stated that the company is actively following up with the Ministry of Railways from time to time for appointing the requisite number of Independent Directors, including a Women Independent Director on its Board. However, the matter remains pending at the level of the Government of India, indicating the complex approval processes involved in government company board appointments.

Financial and Operational Impact

IRCTC has assured stakeholders that the imposed fines will have no impact on the company's financial, operational, or other activities. The management has also noted that similar situations have occurred in the past, and waiver requests were considered favorably by the exchanges, suggesting there may be precedent for potential relief.

The company's disclosure under Regulation 30 of SEBI (LODR) Regulations, 2015, demonstrates its commitment to transparency in communicating material developments to investors and regulatory authorities. This regulatory filing was signed by Company Secretary and Compliance Officer Suman Kalra on February 28, 2026.

Regulatory Context

The fines highlight the ongoing challenges faced by government companies in meeting corporate governance requirements while operating within the constraints of government appointment processes. The requirement for women directors on corporate boards is part of broader regulatory initiatives to enhance board diversity and governance standards in listed companies.

IRCTC is scheduled to face exclusion from the MSCI index today at 3pm, marking a significant development for the railway catering and tourism company. The exclusion, valued at $148 million (₹13.5 billion), comes as part of MSCI's February rejig announcement.

MSCI Index Exclusion Details

The exclusion represents a substantial market impact for IRCTC, with the affected value reaching significant proportions. MSCI's periodic index reviews involve comprehensive assessment of constituent stocks based on various criteria including market capitalization, liquidity, and other fundamental factors.

Market Implications

MSCI index exclusions typically result in reduced institutional investment flows, as passive funds tracking these indices are required to sell their holdings in excluded stocks. This mechanical selling pressure often creates short-term volatility and potential downward pressure on stock prices.

About the February Rejig

MSCI conducts regular index reviews to ensure that its indices accurately represent the investable universe for international investors. The February rejig is part of this ongoing process, where stocks are evaluated for inclusion or exclusion based on updated market data and eligibility criteria.