Retail investors will have the opportunity to bid on IRCTC’s Offer for Sale (OFS) on Friday, the last day for issuance, said Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey.
The government plans to sell up to a 20 percent stake in IRCTC through OFS, which opened for subscription on Thursday.
“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 an offset price above the floor price by non-retail investors. The government has decided to exercise the green shoe option. Retail investors get a bid tomorrow, “Pandey said in a tweet.
The promoter proposes to sell up to 2.40,00,000 shares of IRCTC, representing up to a 15% stake, with the option to additionally sell 80,00,000 shares, representing 5% of the total issued and paid-up share capital. the company had said in a regulatory filing.
The minimum bid price will be Rs 1,367, he had said.
In total, the promoter, the Government of India, will sell shares of Rs 3.2 crore, which is expected to generate Rs 4,374 crore for the private treasury of funds due to the Covid-19 crisis.
IRCTC shares closed Thursday at Rs 1,451.95 apiece on the BSE, down 10.27 percent from their previous close.
IRCTC OFS will help the government get closer to 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 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, 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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