In a bid to cash in on the stock market revival, the government is planning is to launch the initial public offering (IPO) of the Indian Railway Catering and Tourism Corp. Ltd (IRCTC) on September 30, according to media reports.
IRCTC, a state-owned firm which handles ticket-booking and catering for the Indian Railways, is expected to announce the price band for its IPO as early as Wednesday, according to these reports.
It was earlier reported that the government is looking to offload up to 20 million shares in the company through the IRCTC IPO, which will help in raising Rs 500-600 crore. The IPO is likely to cut the government’s stake in IRCTC by about 12.5%.
The development, if true, is in sync with the earlier expectation of IRCTC launching its IPO in the upcoming Hindu festive season of Navaratri which begins on 29 September. The IPO will help the government achieve its record divestment target of Rs 1.05 lakh crore for 2019-20.
IRCTC has already filed its draft red herring prospectus (DRHP) with capital market regulator, Securities and Exchange Board of India, in August. IDBI Capital, SBI Capital Markets and Yes Securities will handle the public offer.
According to its DRHP, IRCTC’s sales rose 25% to Rs 1,899 crore in 2018-19 compared with the previous year, while its profit jumped 23.5% to Rs 272.5 crore. Further, data showed that IRCTC was one of the most transacted websites in the Asia-Pacific region in the last fiscal year, with customers booking around 800,000 tickets per day.
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