Indian Railway Catering and Tourism Corporation (IRCTC), which is the only entity authorized by Indian Railways to provide catering services to the Indian Railways, is planning to raise money via an initial public offer (IPO). IRCTC is planning to sell 20,160,000 equity shares of face value of Rs. 10 each in the price band of Rs. 315-320 to raise up to Rs. 645 crore. The online ticketing arm of Indian Railways, IRCTC also provides packaged drinking water at railway stations and trains across the country. (Also Read | IRCTC IPO: Share Price, Valuation, Other Details)
After the public offer, Government of India’s holding in IRCTC will come down to 87.40 per cent. IRCTC aims to achieve the benefits of listing the equity shares on the stock exchanges.
Investors can bid for IRCTC shares in the price band of Rs. 315-320 per lot (40 shares). The retail investors and employees of IRCTC are being offered a discount of Rs. 10 per share.
The IPO will open on September 30 and last date for bidding will be October 3.
IRCTC’s market capitalisation after the conclusion of the IPO will be Rs. 5,040 crore – Rs. 5,120 crore.
While 50 per cent of the IRCTC IPO is reserved for qualified institutional buyers, 15 per cent is reserved for non-institutional buyers and 35 per cent for retail investors. The company has set aside 1.6 lakh shares in the IPO for its employees.
IDBI Capital, SBI Capital Markets and Yes Securities are the book running lead managers of the IPO and Alankit Assignments is the registrar.
IRCTC was incorporated on September 27, 1999 and is a central public sector enterprise wholly owned by the Government of India under the administrative control of the Ministry of Railway.
IRCTC operates www.irctc.co.in, one of the most transacted websites in the Asia-Pacific region, with transaction volumes averaging 2.5-2.8 crore per month in the five-month period ended August 31, 2019, Axis Capital said in a note.
Currently, IRCTC operates in four business segments: internet ticketing, catering, packaged drinking water, and travel and tourism. IRCTC has also diversified into other businesses, including non-railway catering and services such as e-catering, executive lounges and budget hotels, which are in line with their objective to build a “one stop solution” for their customers, Axis Capital added
In the quarter ended March 2019, IRCTC posted a net profit of Rs. 272.60 crore, which was up 23.56 per cent compared Rs. 220.62 crore in the corresponding period a year ago.