The company has set a price band of Rs 315-320 per share for its IPO, and when calculated at the upper band of the issue price, the company will be valued at around Rs 5,100 crore.
State-owned Indian Railway Catering and Tourism Corporation (IRCTC), which handles the ticketing and catering services for Indian Railways, is planning to raise around Rs 645 crore from its initial public offering (IPO) at the upper end of the price band. The company has set a price band of Rs 315-320 per share for its IPO, and when calculated at the upper band of the issue price, the company will be valued at around Rs 5,100 crore.
The railway ticketing provider’s IPO comprises an offer for sale (OFS) of 2.01 crore equity shares with 50% of the offer reserved for qualified institutional buyers (QIBs), 15% for non-institutional buyers (NIBs), which includes high net-worth individuals (HNIs), and 35% for retail investors. The offer represents 12.5% of the Government of India’s stake, which would be brought down to 87.5% following the issue. The IPO will open on Monday (September 30) and close on October 3, 2019.
Finance minister Nirmala Sitharaman in her maiden Budget speech in 2019 said that the government is going to undertake strategic sales of public sector undertakings (PSUs) and enhanced the disinvestment target to Rs 1.05 lakh crore for FY20. IRCTC is 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. For FY19, IRCTC’s revenues amounted to Rs 1,956 crore, up 24.5% year-on-year (y-o-y), while profit after tax (PAT) stood at Rs 272.5 crore, gaining around 23.6% (y-o-y).
“Catering services is the biggest revenue generator with 55% of revenues coming from the segment. The e-catering platform as of FY19 has generated nearly `40 crore worth of revenue in FY19,” said IRCTC chairman and managing director Mahendra Pratap Mall.