IRCTC's Rs645-crore share sale gets offers worth Rs72,000 crore
04 October 2019
The initial public offer (IPO) of Indian Railway Catering and Tourism Corporation (IRCTC), which closed on Thursday, saw huge demand with subscriptions close Rs72,000 crore or 112 per cent for the Rs645 crore share offer, NSE data showed.
Investors bid for over 2.25 billion shares of the company against 20.2 million shares on offer, as of 6:00 pm on Thursday, as per the data on NSE. The shares are priced in a Rs315-320 band.
Retail investors led the bidding, followed by non-institutional investors and qualified institutional buyers, in that order.
The share sale was covered 81 per cent on Monday. The IPO closed on Thursday as financial markets are closed on Wednesday for Gandhi Jayanti public holiday.
The government will be offloading a little over 12.5 per cent stake in IRCTC and will hold a 87.4 per cent stake in IRCTC after the IPO.
IRCTC will not receive any proceeds from the offer and all proceeds will go to the government, according to the red herring prospectus.
Started as the ticketing and catering wing of Indian Railways, IRCTC is being spinned off as a private train service operator. It has taken over operations of the New Delhi-Lucknow Tejas Express, to begin with, and has already started booking tickets for the train. IRCTC also handles holiday packages and pilgrimage tours for the Indian Railways.
IRCTC is engaged in the sale of railway tickets online, providing catering service and manufacture and supply packaged drinking water at railway stations and on trains across India as also e-catering services to passengers via its mobile phone application.
IRCTC is Asia’s busiest and world’s second most active website, with an average 15-18 million people transacting per month for the quarter ended June 2019.
The IPO is part of the government's divestment process to help meet its target to raise Rs80,000 crore this fiscal year.
IDBI Capital Markets & Securities, SBI Capital Markets and Yes Securities (India) are arranging the share sale.