IRCTC Files For Rs 600 Crore Mega IPO: 5 Things You Should Know
For the first time ever, IRCTC or The Indian Railway Catering and Tourism Corporation has filed for an IPO (Initial Public Offer), which is valued at approximately Rs 500 to Rs 600 crore.
IRCTC has already drafted red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) today (Thursday).
Here are 5 interesting facts you should know:
Fact #1: The Value Of IPO
Through the initial public offering (IPO), the Govt. has made plans to offload shares upto Rs. 2 crores in the IRCTC. This is estimated to fetch Rs. 500 – 600 crore to the Centre.
This sort of stake sale will reduce the Government’s stake in IRCTC by about 12.5%
IRCON International and RITES are the two entities which marked their market entry in the financial year 2018-2019. These two are among the five railway entities whose listing was approved by the Central Government, which are IRCON International, RITES, Rail Vikas Nigam Ltd, IRFC and IRCTC. This listing was approved in April 2017.
Fact #2: The Plan Of Disinvestment
The proposed stake sale in the ticketing arm is also part of the government’s divestment plan, for which it has budgeted to raise ?90,000 crore in the current financial year, up from ?85,000 crore in the last fiscal. and IRCTC’s proposed listing on the stock bourses is part of the government’s plans to take public several entities operating in the railways sector
Fact #3: The Exciting Numbers
The issue comprises 2 crore equity shares of face value of Rs 10 each, of which up to 50 per cent 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.
Fact #4: The Planning
This IPO hasn’t come all of a sudden. In April 2017, Govt. of India approved listing of 5 railway entities and generate funding from them: IRCON International, RITES, Rail Vikas Nigam Ltd, IRFC and IRCTC. Of these IRCON International and RITE.
Out of these, only IRCON International and RITES have only debuted in the stock market last year.
Fact #5: Investors Numbers & Stock Allocation
We have received some interesting details related with the IPO. To start with, the IPO (if approved), will comprise of 2 crore equity shares, with a face value of Rs 10 each. Out of this, 50% will be available for qualified institutional buyers (QIBs), which also includes 2 lakh shares for mutual fund portion on a proportionate basis.
At the same time, 30 lakh shares or 15% of the total offer, will be available for non-institutional bidders.