The government will sell up to 20 per cent stake in Indian Railway Catering and Tourism Corporation through an offer for sale, which opens for subscription on Thursday. In the early trade after the market opened, IRCTC shared went down over 10 per cent to Rs 1,451. Shares of IRCTC on Wednesday closed at Rs 1,618.05 on the BSE, down 1.55 per cent from its previous close.
The floor price for the offer shall be Rs 1,367. Today the sale will be for non-retail investors. On day two, the sale will be open to retail investors.
The government would divest 15 per cent equity with a 5 per cent green shoe option, the department of investment and public asset management (DIPAM) secretary Tuhin Kanta Pandey said.
The promoter proposes to sell up to 2,40,00,000 equity shares of IRCTC, representing up to 15 per cent stake, with an option to additionally sell 80,00,000 shares, representing 5 per cent of the total issued and paid up equity share capital, the company said in a regulatory filing.
In all, the promoter, which is the government of India, will sell 3.2 crore shares, which is expected to garner Rs 4,374 crore for the exchequer. This will help the government in meeting the Rs 2.10 lakh crore disinvestment target. Out of this target, Rs 1.20 lakh crore will come from disinvestment of public sector undertakings and another Rs 90,000 crore from stake sale in financial institutions.
The government currently holds 87.40 per cent stake in IRCTC. To meet Sebi’s public holding norm, the government has to lower its stake in the company to 75 per cent.
IRCTC, the only entity authorised by Indian Railways to provide catering services, online railway tickets and packaged drinking water at railway stations and trains in India, was listed on the stock exchanges in October 2019. The company had raised Rs 645 crore through the IPO.
The Union Cabinet had in April 2017 approved listing of five railway companies. While four of them — IRCON International Ltd, RITES Ltd, Rail Vikas Nigam Ltd and IRCTC — have already been listed, IRFC is likely to be put on the block this fiscal.