State-run IRCTC’s IPO fully covered on second day
Photo Credit: VCCircle

The initial public offering of state-run Indian Railway Catering and Tourism Corp. (IRCTC) was fully subscribed on the second day of the issue on Tuesday.

The offering of 20.16 million shares was covered 3.25 times after receiving bids for nearly 65.57 million shares, stock-exchange data showed.

Retail investors led the bidding, as their quota of shares was covered 6.2 times. The portion set aside for qualified institutional buyers was subscribed 1.65 times while that for non-institutional investors was covered 1.73 times.

The share sale was covered 81% on Monday. The IPO closes on Thursday as financial markets are closed on Wednesday for Gandhi Jayanti public holiday.

IRCTC, which provides online ticketing service for the world’s fourth-biggest rail network, is seeking Rs 5,120 crore ($721 million) in valuation through the IPO that is entirely a share sale by the government. At the upper end of the price band, IRCTC’s public offering will fetch the government Rs 645 crore ($91 million). The sale is part of the government’s disinvestment programme.

The IPO will bring down the government’s stake to 87.4% from 100% earlier. It will get three years from the listing date to bring its stake down to 75% or below as per the minimum public shareholding norms for listed companies.

The company had filed its draft prospectus last month and received approval from the capital markets regulator on September 17. VCCircle had first reported about IRCTC’s IPO plans and merchant banker appointment in May 2017.

IDBI Capital Markets & Seucities, SBI Capital Markets and Yes Securities (India) are arranging the share sale.

Incorporated in September 1999, IRCTC is the sole catering services provider and online ticketing platform to the Indian Railways. It also sells packaged drinking water at railway stations and on trains, and offers travel packages.

IRCTC is Asia’s busiest and world’s second most active website, with an average 15-18 million people transacting per month for the quarter ended June 2019.

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