IRCTC IPO: The initial public offer (IPO) of Indian Railway Catering and Tourism Corporation (IRCTC), a subsidiary of the Indian Railways, was subscribed nearly five times on the last day of bidding today.
The lot size of IRCTC IPO is 40. So at the price band of ₹305-310 per share for retail investors, one lot will cost ₹12,200-12,400.
IRCTC IPO allotment date and listing date:
Allotment date: 9 October (tentative).
Listing on BSE and NSE: 14th October (tentative)
What brokerages say:
During FY17-19, IRCTC’s revenue and PAT clocked 10% and 9% CAGR, respectively while the average EBITDA and net margin stood at 20% and 15%, respectively during FY17-19, says Reliance Securities, which has a subscribe rating to the issue. “It has a healthy balance sheet with ₹1,100 crore cash to support CAPEX. IRCTC has good dividend pay-out track record, as it made 50% average payout in the last 3 years,” the brokerage added.
The IPO which has been a huge hit among investors was fully subscribed on the second day of bidding on Tuesday. On the first day of bidding, the Rs 645-crore IRCTC IPO was subscribed 81.31%. The IPO received bids for 1,63,94,040 shares compared to 2,01,60,000 or 2.01 crore equity shares on offer on the first day.
The public issue, which closes, is a part of the government’s divestment programme for the financial year 2019-20. The government which owns 100% in IRCTC plans to sell a 12.6% stake in the firm.
After the IPO, the government’s stake in the firm will fall to 87.4%. IRCTC is engaged in internet ticketing, catering, packaged drinking water and travel and tourism. IRCTC has also diversified into other businesses, including non-railway catering and services such as e-catering, executive lounges and budget hotels. The issue involves the sale of 2.01 crore equity shares of the face value of Rs 10 each in a price band of Rs 315 to Rs 320.
Post listing, the market capitalisation of the government-owned firm is pegged at Rs 5,120 crore at the higher end of price band The book running lead managers to the offer are IDBI Capital Markets & Securities, SBI Capital Markets and YES Securities (India). The company would not receive any proceeds from the IPO and “all proceeds shall go to shareholders”, IRCTC said.
IRCTC is engaged in internet ticketing, catering, packaged drinking water and travel and tourism. IRCTC has also diversified into other businesses, including non-railway catering and services such as e-catering, executive lounges and budget hotels.