IPO Update: IRCTC IPO to hit markets on September 30

In an aim to raise Rs. 635-645.12 crore, the state-owned Indian Railway Catering and Tourism Corporation (IRCTC) is set to enter the capital market with Initial Public Offering (IPO) on September 30, 2019. The IPO, starting on the second day of Navratri, closes on October 3.

The IPO comprises of an offer for sale of 2 crore shares (representing 12.50 percent of total paid-up equity) by the central government. It must be noted that the President of India acting through the Ministry of Railways, Government of India is the only promoter of IRCTC. There would also be additional employee reservation portion of 1.6 lakh shares, taking the total offer size to 12.6 percent of total paid-up equity.

After discussion with merchant bankers, IRCTC has set the price band for the IPO at Rs. 315-320 per share. As it is an offer for sale issue, the company will not receive any proceeds from the offer and all proceeds will go to the selling shareholder.

IDBI Capital Markets & Securities, SBI Capital Markets and Yes Securities (India) are book running lead managers (BLRMs) to the issue, while, Alankit Assignments Ltd. is the registrar.

Incorporated in 1999, IRCTC is a wholly-owned enterprise by the Government of India under the administrative control of the Ministry of Railways. IRCTC is the only authorized entity by the Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India.

The IRCTC IPO is a part of government's full year divestment programme announced in Budget 2019 by Finance Minister Nirmala Sitharaman. The government targets to raise Rs. 1.05 lakh crore through divestment in FY20.