Given the recent rally in the stock markets, state-run Indian Railway Catering and Tourism Corp Ltd (IRCTC) plans to launch its initial public offering (IPO) on 30 September, suggested media reports.
The government has already filed IRCTC's draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi) in August this year.
While the document does not mention offer size, it is expected that the company is expected to raise Rs 500-600 crore through IPO. Following the IPO, the government's stake in IRCTC will come down by 12.5 per cent. The book running lead managers to the IRCTC IPO are IDBI Capital Markets & Securities Limited, SBI Capital Markets Limited and Yes Securities (India) Limited.
The company plans to offload about two crore equity shares of the face value of Rs 10 each through an offer for sale by the government. Out of this, 50 per cent shares will be available for allocation to qualified institutional buyers (QIBs), including 2 lakh equity shares for the mutual fund portion on a proportionate basis. In addition, not less than 30 lakh equity shares, or 15 per cent of the total offer, will be available to non-institutional bidders and at least 35 per cent to retail individual bidders.
If the IPO is successful, it will help the Modi government meet its disinvestment target of Rs 1.05 lakh crore for the current fiscal. The government has budgeted to raise Rs 90,000 crore by way of CPSE disinvestment in the current fiscal, up from Rs 85,000 crore in FY19.
In April 2017, the Cabinet Committee on Economic Affairs had approved listing of five railway companies, namely IRCON International, RITES Ltd, Rail Vikas Nigam Ltd (RVNL), Indian Railway Finance Corporation (IRFC) and IRCTC. Of these, IRCON International and RITES were listed in 2018-19, and in April, the government raised about Rs 480 crore by selling about a 12 per cent stake in RVNL. The IRFC IPO is expected to garner around Rs 1,000 crore for the government.
The Indian stock market has witnessed record rally in the last two-days after the government announced a host of measures to boost slowing economic growth. The Indian benchmark index Sensex has rallied over 2,000 points since Friday after Finance Minister Nirmala Sitharaman delivered a surprise cut in corporate tax rates. The announcements were made during trading hours on Friday which send the markets soaring.
Edited by Chitranjan Kumar