Friday, September 30, 2022

IRCTC IPO fully subscribed on Day 2 of bidding process

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New Delhi: The initial public offer (IPO) of Indian Railway Catering and Tourism Corporation (IRCTC) was fully subscribed on Day 2 of the bidding process. Continued support from retail investors saw the IRCTC IPO being subscribed 3.25 times on Tuesday.

IRCTC IPO received bids for 6.55 crore equity shares

According to the data available on exchanges, the Rs 645-crore IRCTC IPO received bids for 6.55 crore equity shares against the IPO size of 2.016 crore shares. While the retail investor category was subscribed 6.2 times, non-institutional investors was subscribed 1.73 times and qualified institutional buyers 1.65 times. The reserved portion of employees was subscribed 2.64 times.

The backdrop

The IPO had got off to a strong start on September 30 and was subscribed 81 percent on Day 1. On that day, the offer received bids for 1.64 crore equity shares against the offer size of 2.016 crore shares, data available on the National Stock Exchange showed. While shares for retail investors was subscribed 2.2 times, employees portion also witnessed full subscription. Non-institutional investor category saw a subscription of 21 percent.

The initial public offer has a price band of Rs 315-320 per share. At the upper price band, the stock is available at P/E multiple of 18.8 times to its FY19 EPS of Rs 17.

A thumbs-up

“Coupled with healthy dividend payout (45 percent in FY19) and RoE (26.1 percent), we recommend subscribe rating to the issue at the offer price. Further, at the IPO price band, the stock is available at a price to earnings multiple of 10 times FY21E EPS, which we believe looks attractive from the perspective of future earnings growth,” a brokerage firm, Indianivesh, said.

“IPO looks conservatively priced at a PER (price earnings ratio) of around 19x based on FY19 earnings.
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We recommend subscribe,” said the firm.

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