The much awaited Indian Railway Catering and Tourism Corporation (IRCTC) IPO may hit the stock market on September 30, sources aware of the development told Financial Express Online. The details including price band and bid lot may be revealed tomorrow, the sources added. On September 13, Financial Express Online had reported that the railway PSU will launch its IPO in the upcoming Navratri season which begins on September 29. IRCTC had filed the draft red herring prospectus (DRHP) with capital market watchdog SEBI in August. We take a look at key details of IRCTC public offer so far.
IRCTC eyes Rs 600 crore through IPO
Through the IRCTC public offer, the Narendra Modi-led government is looking to offload up to 2 crore shares to raise between Rs 500 and 600 crore, according to a recent PTI report. Following the IPO, the government’s stake in IRCTC will come down by 12.5%. IDBI Capital, SBI Capital Markets and Yes Securities will handle the initial public offering.
Robust operating metrics
IRCTC generated a revenue of Rs 1,899 crore in FY19, up 25% from the previous fiscal, the firm’s DRHP revealed. The railway PSU’s net profit jumped 23.5% on-year to Rs 272.50 crore in financial year 2019. The firm which sells tickets for Indian Railways and handles its catering services saw 72 lakh logins per day, and 2.5 crore logins in a month, data from DRHP showed. IRCTC has earned the reputation of being one of the most transacted websites in the Asia-Pacific region, with customers booking around 8 lakh tickets per day. Incorporated by the government in 1999, IRCTC was conferred the status of Miniratna (Category-I Public Sector Enterprise) status in 2008.
IRCTC’s Catering Business
While IRCTC’s ticket sales records are notable, the catering business contributed to a major chuck of the total sales. In the previous fiscal year, IRCTC earned Rs 1,044 crore from catering, and Rs 444 crore from its tourism and travel related services. Through ‘Rail Neer’, its packaged drinking water business, IRCTC got Rs 176 crore in revenues in FY19.
Other recent PSU public offers
The IRCTC IPO is part of the government’s mega disinvestment programme to raise a record Rs 1.05 lakh crore in 2019-20, or about Rs 20,000 crore more than it collected in the previous fiscal. IRCTC IPO comes after the central government approved listing of five railway entities—IRCON International, RITES, Rail Vikas Nigam Ltd, IRFC and IRCTC. Notably, railway firms IRCON International and RITES made their market debut in fiscal 2018-19. Further, in April this year, the government had raised about Rs 480 crore through RVNL (Rail Vikas Nigam Ltd) initial public offer, by selling 12.2% stake.