The government has decided to sell up to 20 per cent stake in Indian Railway Catering and Tourism Corporation (IRCTC) through an OFS or offer for sale. Subscriptions for the same opened on Thursday.
As part of the plan, the Centre has proposed to sell up to 2.4 equity shares of IRCTC — representing 15 per cent of the total shares issued and paid-up equity share capital — to non-retail investors through an OFS, which has already opened for subscription today for non-retail investors only.
IRCTC has mentioned the plan in detail in a regulatory filing to the stock exchanges. At around 2:10 pm, shares of IRCTC were trading 8.23 per cent lower at Rs 1,484.55.
While non-retail investors will be allowed to bid today, retail investors will be able to subscribe to the IRCTC OFS on Friday (December 11). The bidding offer will be open for retail investors on tomorrow.
Moreover, the non-retail investors who chose to carry forward their un-allotted bids with an option to additionally sell 80,00,000 equity shares, representing 5% of the total issued and paid-up equity share capital.
It is worth noting that a floor price of Rs 1,367 has been set for the sale of each share.
At present, the government holds 87.4 per cent stake in IRCTC. However, to meet Sebi’s public holding norm, the government has to lower its stake in the company to 75 per cent.
IRCTC, which is 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 has raised Rs 645 crore through an initial public offering (IPO).
In total, the government will sell 3.2 crore IRCTC shares — a move which is expected to garner Rs 4,374 crore for the exchequer. The IRCTC OFS is likely to help the government in meeting the Rs 2.10 lakh crore disinvestment target.
Three years ago, the government had approved listing five railway companies. While four of them — IRCON International Ltd, RITES Ltd, Rail Vikas Nigam Ltd and IRCTC - have been listed already, IRFC is likely to be put on the block in this fiscal year.