IRCTC stock price zooms 7.57% to Rs 779, but Indian Railways is unhappy

Investors who got allotment of Indian Railway Catering and Tourism Corporation’s (IRCTC’s) initial public offer (IPO) are rejoicing as their money has more than doubled within a few days but the Indian Railways is unhappy with the merchant bankers about the pricing of the IPO. IDBI Capital Markets, SBI Capital Markets and Yes Securities were bankers to the issue.

In the IPO investors were offered shares at Rs 320, whereas retail investors and employees got a discount of Rs 10 on the shares, which was allotted to them at Rs 310.

The company was valued at Rs 5000 crore and the government raised Rs 645 crore by selling 12.60% in IRCTC.

The IPO was over subscribed by 112 times due to the attractive valuation. On the day it was listed IRCTC shares opened at Rs 644 and closed at Rs 729 on the exchanges. Thus giving a valuation of Rs 11,700 crore to the company, which was double the valuation given to the company. The listing of the IPO has raised a question mark over the valuation done by the merchant bankers.

With many PSU IPOs in the pipline, Indian Railways has lodged a protest about the price at which shares were offered to investors and has sought better due diligence for future transactions, said a leading daily.

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