IRCTC plunges 13% as two-day OFS kicks off

NEW DELHI: Shares of IRCTC fell 13 per cent in Thursday's trade after the government kicked off an offer for sale (OFS) to sell up to 2.40 crore shares or 15 per cent of the paid-up equity share capital of IRCTC.

The government also proposed an additional share sale of up 80 lakh equity shares of 5 per cent of the paid-up equity share capital, in case of oversubscription. In total, the base offer size and oversubscription option represent 20 per cent of outstanding equity shares of the company.

The floor price of the offer fixed at Rs 1,367 per equity share was 15.6 per cent discount to Wednesday's closing price of Rs 1,618.05.

Following the development, the stock fell 13.16 per cent to hit a low of Rs 1,405 on BSE. The stock, however, recovered some lot ground later.

The government at present 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 IRCTC share sale will take place on a separate window of the stock exchanges on December 10 and December 11. Only retail investors shall be allowed to place their bids on December 11.