The sale of the government’s 5 per cent stake in Indian Railway Catering and Tourism Corporation Ltd (IRCTC) got over-subscribed on the first day of the offer with institutional investors putting in bids worth Rs 3,775 crore. In the two-day offer-for-sale (OFS), the Centre is selling four crore shares or 5 per cent stake in IRCTC at a floor price of Rs 680 apiece.
The OFS consists of base issue size of 2 crore shares or 2.5 per cent stake, with an option to retain over-subscription of a similar amount. The state-owned firm said in a regulatory filing on Thursday that the Centre has decided to exercise the greenshoe option following which the total offer size will be four crore shares.
As much as 10 per cent of the issue is reserved for retail investors, who will bid on Friday. Data from the stock exchanges showed the OFS received bids for over 5.55 crore shares, indicating that the float was subscribed more than 3.08 times by institutional investors over the base issue size of 1.80 crore shares.
Calculated on the basis of the floor price, the bids would be valued at about Rs 3,775 crore. The floor price was at a discount of 7 per cent over Wednesday’s closing price of Rs 734.70. The Government holds 67.40 per cent stake in IRCTC. The Centre has already raised Rs 28,383 crore from the stake sale in PSUs so far this fiscal year and has set a target of Rs 65,000 crore from such disinvestment. Shares of IRCTC however ended weaker on Thursday.
It settled at Rs 689.20, a drop of 6.19 per cent or Rs 45.50 on the BSE. During intra-day trades, the counter slid to a low of Rs 687 which showed a fall of almost 6.50 per cent. IRCTC had posted a net profit of Rs 226.03 crore in the second quarter ended September 30, 2022 against Rs 158.57 crore in the same period of the previous year. Revenues during the period came in at Rs 805.80 crore against Rs 404.93 crore in the year-ago period. With India becoming one of the most sought after destinations in Asia for medical tourism, IRCTC recently said it is offering medical treatment packages at competitive prices to tap the growing wellness tourism market.