IRCTC OFS: Govt to offload 20% stake
Shares of Indian Railway Catering & Tourism Corp (IRCTC) lost favour among investors as the government is planning to sell up to 20% stake in the company through an Offer for Sale (OFS) which opens for subscription today.
The catering services provider stock price fell 13% intraday on December 10 following the announcement.
The floor price for the offer has been fixed at Rs 1,367.
Offer for Sale in IRCTC opens tomorrow for Non Retail investors. Day 2 for retail investors. The government would divest 15% equity with a 5% green shoe option, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said in a tweet.
The government proposes to sell up to 2,40,00,000 equity shares of IRCTC with an option to additionally sell 80,00,000 shares.
In all, the promoter- Government of India- will sell 3.2 crore shares, which is expected to garner Rs 4,374 crore for the exchequer starved of funds due to the COVID-19 crisis.
At present, the government holds 87.4% stake in IRCTC. However, to meet Sebi’s public holding norm, the government has to lower its stake in the company to 75%.
IRCTC, which is the only entity authorised by Indian Railways to provide catering services, online railway tickets and packaged drinking water at railway stations and trains in India, was listed on the stock exchanges in October 2019. The company has raised Rs 645 crore through an initial public offering (IPO).
This document is meant for the recipient only for use as intended and not for circulation. This document should not be reproduced or copied or made available to others. The information contained herein is from the public domain or sources believed to be reliable. While reasonable care has been taken to ensure that information given is at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the very nature of research it cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. Also above note is not a recommendation to Buy or SELL and is only a view based on facts and figures and we will be in no way responsible for any losses incurred by anyone who uses this information to either trade or invests securities mentioned herein.