Govt looking to disinvest 15-20% share via IRCTC OFS, says DIPAM

• DIPAM floated a request for proposal (RFP) on August 20, seeking to engage merchant bankers and selling brokers for the IRCTC OFS

• The authorised capital of IRCTC is Rs 250 crore and paid-up capital is Rs 160 crore

New Delhi: The Centre is looking to disinvest 15-20 percent of its stake in Indian Railway Catering and Tourism Corporation (IRCTC) through offer for sale (OFS), the Department of Investment and Public Asset Management (DIPAM) said on Monday. In response to a query posed by merchant bankers and selling brokers, DIPAM said, "The indicative percentage is 15 percent to 20 percent. The exact details will be shared with the selected Merchant Bankers."

DIPAM floated a request for proposal (RFP) on August 20, seeking to engage merchant bankers and selling brokers for the IRCTC OFS. The department has asked interested entities to submit their bids online by September 10.

Govt to allot shares to eligible and willing employees

The government is also considering allotting shares to eligible and willing employees of IRCTC at a discount to the issue/discovered price (lowest cut off price) up to a maximum of certain percentage of the OFS size, subsequent to the completion of the transaction under OFS. The percentage and extent shall be decided in due course, said DIPAM.

IRCTC has authorised capital of Rs 250 cr

The authorised capital of IRCTC is Rs 250 crore and paid-up capital is Rs 160 crore. As on date, the Ministry of Railways, holds 87.40 percent of the paid-up share capital of the company amounting to 13,98,40,000 shares. IRCTC earned a total revenue of Rs 2,353.54 crore in FY20, up 20.14 percent from the total revenue of Rs 1,958.94 crore earned in FY19. IRCTC had paid an interim dividend of Rs 160.00 crore and the board recommended the final dividend of Rs 40.00 crore, aggregating to a total of Rs 200.00 crore for FY 2019-20. IRCTC's profit before tax grew 55.75 percent to Rs 745.35 crore in FY20 from Rs 478.56 crore in FY19, while the total comprehensive income saw a rise of 69.96 percent to Rs 524.88 crore in FY20 from Rs 308.82 crore in FY19.

Also read: IRCTC shares zoom 523% from issue price despite market volatility

In FY2020-21, the government is aiming to raise Rs 2.1 lakh crore via disinvestment through majority and minority stake sales. An official who spoke to PSU Watch earlier said that a number of minority stake sales have been planned but they will be rolled out, keeping in view the situation of the market and investor appetite.

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