IRCTC shares fall for fourth day, government will exercise oversubscription option in OFS

“We wish to exercise the oversubscription option up to the reach of 80,00,000 shares of capital in addition to the size of the base offering. Consequently, the total size of the offering will be 3,20,00,000 shares of capital that represent 20% of the total paid-up capital shares of the company’s capital as of September 30, 2020, “the government said in a statement to the exchanges on Thursday.

The two-day offer for the sale of government shares will end today. The government had an 87.40% stake in IRCTC as of September 30, 2020.

“The offer to sell government shares on IRCTC got a great response from day one. The issue was subscribed 1.98 times its base size at a compensation price above the minimum price by non-retail investors. The Government decided exercise the green shoe option, “DIPAM Secretary Tuhin Kanta Pandey said in a tweet.

The fall in IRCTC’s share price is a good opportunity for investors to “add stocks to their portfolio,” says Gaurav Garg, research director at CapitalVia Global Research. In four days, IRCTC shares have fallen about 15%.

“Given that IRCTC enjoys monopoly power, the discount seems good enough to attract retail investors. As things started to get back to normal, IRCTC is expected to benefit even more once sales resume. trains. Its e-ticket business is also expected to increase in the short term. So this could be a good opportunity for investors to add these stocks to their portfolio, “he said.

IRCTC, the only entity authorized by Indian Railways to provide catering services, online train tickets and bottled drinking water at train and railway stations in India, was listed on the stock exchanges in October 2019. ₹645 crore through the IPO.