Govt to sell 20% stake in IRCTC via 'offer for sale'; plans to raise Rs 4,374 crore

The government will sell upto 20% stake in Indian Railway Catering and Tourism Corporation through an offer for sale on December 10 and December 11 to raise Rs 4,374 crores. Combinedly, the base offer size and oversubscription option represent 20% of outstanding equity shares of the company or 3.2 crore shares. Retail investors can subscribe on Friday while non retail investors can put their bids on Thursday.

The OFS price was set at Rs 1,367 per share, a 15.5% discount to Wednesday’s closing price of Rs 1,618.

How much share govt owns in IRCTC?

The Government of India held 87.4% stake in IRCTC as of September 30, 2020. In August 2020, the government announced its plan to pare its stake in the company. To meet Sebi’s public holding norms, the government has to lower its stake in the company to 75%.

IRCTC - the only entity authorised by Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India - got listed on stock exchanges on October 14 last year. The company had raised Rs 645 crore through IPO.

IRCTC had reported a 67.3% slump in the net profit to Rs 32.63 crore for its second quarter ending 30 September, 2020 as compared to Rs 99.82 crore, a year ago.

The company's revenue from operations during the quarter fell 83% to Rs 88 crore compared to Rs 533 crore in the same quarter, last year. The OFS would help the government inch forward in meeting the Rs 2.10 lakh crore disinvestment target.

IRCTC, a public sector undertaking (PSU) of the Ministry of Railways, is the only entity authorized by the Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India.

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