The government is planning to sell about 15-20 per cent of its stake in Indian Railway Catering and Tourism Corporation (IRCTC) in the current fiscal. The stake sale will be conducted through offer for sale (OFS) route and the transaction will be completed in at least three tranches.
After the IPO of IRCTC held last year, stake of the government in IRCTC has been reduced to 87.40 per cent. The government has to bring down its stake in the company to 75 per cent to meet public holding norms mandated by Securities and Exchange Board of India (SEBI).
The share sale is a part of the Narendra Modi government's ambitious Rs 2.1 lakh crore disinvestment target for fiscal 2020-21 from the sale of government holding in state-owned entities. Of this, the government aims to raise Rs 1.2 lakh crore from disinvestment of public sector entities and another Rs 90,000 crore from the listing of Life Insurance Corporation of India (LIC) and stake sale in IDBI Bank.
Last month, the Department of Investment and Public Asset Management (DIPAM) had invited bids from merchant bankers by September 10 for managing the sale process. "The GoI intends to disinvest a part of the paid up equity capital of IRCTC out of its shareholding through Offer for Sale (OFS) method of shares by promoters through the stock exchanges' as per SEBI rules and regulations," DIPAM had said while inviting Request for Proposal (RFP).
Meanwhile, shares price of IRCTC ended Tuesday's trade at Rs 1,378.05, down 2.57 per cent, against previous closing price of Rs 1,414.40 on the Bombay Stock Exchange.
In an IPO held in September 2019, the government had raised Rs 645 crore by selling 12.6 per cent stake in IRCTC. The stock was listed at Rs 644 per share, more than double the IPO price of Rs 320 a piece.
IRCTC is engaged in internet ticketing, catering, packaged drinking water and travel and tourism. It has also diversified into other businesses, including non-railway catering and services such as e-catering, executive lounges and budget hotels.
The government is also looking at launching initial public offering (IPO) of Indian Railway Finance Corp Ltd (IRFC), and had filed draft red herring prospectus (DRHP) with the SEBI in January for IPO of over 140 crore equity shares.
By Chitranjan Kumar with PTI inputs