IRCTC IPO Closes Today: Know the Details

IRCTC IPO, which opened for subscription on Monday, closed today. Today till 1:15 am, with retail investor segment seeing strong demand IRCTC IPO was subscribed seven times. The government is offering two crore equity shares or 12.6% stake through this IPO. Post-IPO, the government will be left with 87.4% stake. The strong demand is the result of "reasonable valuation" at which IRCTC offered the shares. Many analysts have recommended "subscribe" to IRCTC IPO, citing valuation comfort and IRCTC is the only unit authorised by Indian Railways to deliver catering services to railways, online railway ticketing service and packaged drinking water at railway stations and trains in the country.

IRCTC is offering shares at ₹315-320 per share, but retail investors get a discount of ₹10 per share. So the effective price band of IRCTC IPO for retail investors is ₹305-310 per share. Alankit Assignments Limited is the registrar to the IRCTC IPO.

IRCTC is also venturing as a private train operator as the Railways opens key routes to private operators. In FY19, IRCTC reported a net profit of ₹272.6 crores on revenues of ₹1,867 crores.

IRCTC IPO - Lot Size

The minimum order quantity or the lot size is fixed as 40. So, orders can be placed in the multiples of 40 shares. That means for the price band of ₹305-310 per share retail investors need to spend Rs 12,200-12,400 per one lot.

IRCTC IPO - Allotment and Listing Date (Tentative)

9th October is the tentative date of allotment of IRCTC shares. These IRCTC shares will get listed on both BSE and NSE, and 14th October is the tentative date of this.

Shares Reserved for Staff: The IRCTC IPO comprises an offer for sale (OFS) of 2.01 crore shares, of which, 1.6 lakh are reserved for employees.

Brokerages Recommendation

During FY17-19, IRCTC's revenue and PAT clocked 10% and 9% CAGR, respectively while the average EBITDA and net margin stood at 20% and 15%, respectively, says Reliance Securities, which has a subscribe rating to the issue. "It has a healthy balance sheet with ₹1,100 crore cash to support capex. IRCTC has good dividend pay-out track record, as it made 50% average payout in the last three years," the brokerage further added.

The brokerage says, The Railways has restored convenience for e-ticket from September 19, which was discontinued for some time. With an average monthly 25 million ticket booking, this is likely to generate additional annual revenue of ₹450 crores for IRCTC.

Brokerages like SAMCO Securities, ICICI Securities, Angel Broking, Canara Securities and Prabhudas Lilladher have recommended a subscribe to IRCTC IPO, citing attractive valuation and its monopolistic nature of the business and asset-light model.

Analysts added a change in the policy of the Ministry of Railways could affect the financials of IRCTC while competition could pose a risk to its monopoly position.