The government plans to sell up to a 20 percent stake in Indian Railway Catering and Tourism Corp (IRCTC) through an Offer for Sale (OFS) that opens for subscription on Thursday. “The sale offer in IRCTC opens tomorrow for non-retail investors. Day 2 for retail investors. The government would divest 15% of the share capital with a green option of 5%,” said the secretary of the Department of Investment and Asset Management Public (DIPAM), Tuhin Kanta. Pandey said in a tweet.
The promoter proposes to sell up to 2.40,00,000 shares of IRCTC, representing up to a 15 percent stake, with the option to additionally sell 80,00,000 shares, representing 5 percent of the total issued and paid-up share capital. the company said in a regulatory filing. The minimum bid price will be Rs 1,367, he said.
IRCTC shares closed at Rs 1,618.05 each on the BSE on Wednesday, down 1.55 percent from their previous close. In total, the Indian Government promoter will sell 3.2 million shares, which is expected to get Rs 4,374 crore for private treasury of funds due to the COVID-19
crisis.
IRCTC OFS will help the government advance towards meeting the divestment target of Rs 2.10 crore. Of this, Rs 1.20 crore will come from the divestment of public sector companies and another Rs 90bn from the sale of shares in financial institutions. The government currently has an 87.40 percent stake in IRCTC. To comply with Sebi’s public participation standard, the government has to reduce its stake in the company to 75 percent.
IRCTC, the only entity licensed by Indian Railways to provide catering services, online train tickets, and packaged drinking water at train and railway stations in India, was listed on the stock exchanges in October 2019. The company had raised Rs 645 crore through the IPO. In April 2017, the Union Cabinet approved the listing of five railway companies. While four of them, IRCON International Ltd, RITES Ltd, Rail Vikas Nigam Ltd and IRTC, have already been listed, it is likely that IRFC will put this fiscal block on the block.
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