Indian Railway Catering and Tourism Corporation (IRCTC), a subsidiary of the Indian Railways, is selling shares amid the recent rebound in equity indices following the corporate tax rate cut by the Centre.
The subscription opened on Monday through a three-day initial public offering (IPO) will close on October 3.
Through the IPO, the promoter of Indian Railways, i.e., Government of India is selling its 12.6 per cent stake in the company to get equity shares listing on the stock exchanges. The proceeds from the offer will go to the government.
The catering and ticketing wing of the Railways is aiming to raise up to Rs 645 crore through the IPO. The price band is fixed at Rs 315 to Rs 320 per equity share, however, retail investors and eligible employees would be given a discount of Rs 10 per share.
Here are a few things you need to know before subscribing:
IRCTC IPO price band per share has been set at Rs 315-320 but retail investors and eligible employees can avail a discount of Rs 10 per share. So for retail and eligible employees is Rs 305-310.
The lot size or minimum subscription is 40. So for eligible and retail investors, the amount to be invested would be Rs 12,200-12,400 per lot.
Allotment and listing date
Tentatively, the date of allotment of IRCTC shares is set for October 9. IRCTC shares will get listed on both BSE and NSE for which the tentative date is October 14.
IRCTC is selling 2.01 crore shares and at the upper price band (Rs 320 per share), the company is valued at Rs 5,120 crore. At the lower band (Rs 315 per share) it is valued at Rs 5,040 crore.
Fifty per cent of the total shares on the IPO are reserved for qualified institutional buyers (QIB), while 35 per cent are reserved for retail investors and 15 per cent is reserved for the non-institutional buyers.
In FY19, IRCTC reported a net profit of Rs 272.6 crore and Rs 220.62 crore in FY18. The company’s revenue grew to Rs 1,867.88 crore in FY19 from Rs 1,470.46 crore in FY18.