Mumbai, Sep 30 : The Indian Railway Catering and Tourism Corporation (IRCTC) initial public offering (IPO) opened for subscription on Monday (September 30) and will close on October 3.
Company has set the price band for its IPO at Rs 315-320 per share. The IPO comprises an offer for sale of 20 million shares, representing 12.5 per cent of total paid-up equity, by the ministry of railways.
There would also be additional employee reservation portion of 160,000 shares, taking the total offer size to 12.60 per cent of total paid-up equity. As it is an offer for sale (OFS) issue, the company will not receive any proceeds from the offer and all the capital raised will go to the selling shareholder, which in this case is the railways ministry.
The government intends to raise Rs 635.04-645.12 crore at the aforementioned price band. The minimum bid lot is 40 equity shares and in multiples of 40 equity shares thereafter.
Retail investors and employees will get shares at a discount of Rs 10 apiece to the final offer price. Of the total shares on offer, 50 percent will be allocated to qualified institutional buyers (QIBs), including 200,000 equity shares set aside for the mutual fund portion on a proportionate basis. In addition, 15 percent of the offer will be available to the non-institutional investor category, and at least 35 percent will be made available to the retail category. IDBI Capital Markets and Securities, SBI Capital Markets and Yes Securities (India) are book running lead managers to the issue.
The stake sale in IRCTC is a part of the central government’s full year divestment programme set in the Budget 2019, under which finance minister Nirmala Sitharaman had set a disinvestment target of Rs 1.05 lakh crore for FY20. IRCTC is wholly owned by the Centre and comes under the administrative control of Indian Railways. It earns a fee on every train ticket it sells online and manages the catering of the food served in trains. It sells packaged drinking water and earns revenue through travel and tourism business.
Besides, starting this weekend, IRCTC, in a first, will function as a private train operator as it prepares to launch two brand Tejas Express trains, an initiative that will help the state-run company generate additional revenue and plan for more such offerings. (UNI)