IRCTC IPO subscribed 81% on Day 1

New Delhi: The Rs 645-crore initial public offer (IPO) of state-run Indian Railway Catering and Tourism Corporation (IRCTC) got off to a strong start on Monday. The IRCTC IPO was subscribed 81 percent on Day 1 of the bidding process.

IRCTC IPO received bids for 1.64 crore equity shares

The IRCTC IPO 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.
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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. We recommend subscribe," said the firm.