IRCTC offer-for-sale subscribed 198 per cent on the first day

The offer-for-sale for the Indian Railway Catering and Tourism Corp (IRCTC) that opened for non-retail investors on December 10, 2020, got a good response from non-retail investors as the issue was subscribed 198 per cent (1.98 times) on the first day of bidding.

The issue will remain open for retail investors and non-retail investors who choose to carry forward their bids on the second and last day for subscription, today.

On day 1 of the offer, the non-retail category saw subscription of 4,27,68,445 equity shares against the base offer size of 2,40,00,000.

The promoter proposes to sell up to 2,40,00,000 equity shares of IRCTC, representing up to 15 per cent stake, with an option to additionally sell 80,00,000 shares, representing 5 per cent of the total issued and paid-up equity share capital, the company had said in a regulatory filing.

The floor price for the offer has been fixed at Rs 1,367. In all, the promoter, Government of India will sell 3.2 crore shares, which is expected to garner Rs 4,374 crore for the exchequer starved of funds due to the COVID-19 crisis.

IRCTC OFS will help the government inch closer in meeting the Rs 2.10 lakh crore disinvestment target. Of this, Rs 1.20 lakh crore will come from disinvestment of public sector undertakings and another Rs 90,000 crore from stake sale in financial institutions.

The government holds 87.40 per cent stake in IRCTC. To meet SEBI'S public holding norm, the government has to lower its stake in the company to 75 per cent.

IRCTC, the only entity authorised by Indian Railways to provide catering services, online railway tickets and packaged drinking water at railway stations and trains in India, was listed on the stock exchanges in October 2019. The company had raised Rs 645 crore through IPO.

The Union Cabinet had in April 2017 approved listing of five railway companies. While four of them -- IRCON International, RITES Ltd, Rail Vikas Nigam Ltd and IRTC -- have already been listed, IRFC is likely to be put on the block this fiscal.