Govt pares 20% shareholding in IRCTC; OFS closes with 109.84% subscription

The Centre has successfully pared its shareholding in state-run Indian Railway Catering and Tourism Corporation (IRCTC) by 20 percent through offer for sale (OFS)
Govt pares 20% shareholding in IRCTC; OFS closes with 109.84% subscription
  • The OFS of IRCTC closed with strong interest from retail investors and 109.84% subscription, said DIPAM

  • The Centre's stake in IRCTC has now come down to 67.4 percent

New Delhi: The Centre has successfully pared its shareholding in state-run Indian Railway Catering and Tourism Corporation (IRCTC) by 20 percent through offer for sale (OFS) on Friday as retail investors lapped up all shares. The Department of Investment and Public Asset Management (DIPAM) said in a tweet, "The OFS of IRCTC closed with strong interest from retail investors and 109.84% subscription. With this, IRCTC is now MPS compliant. We thank all investors for their participation and making the deal so successful." The Centre's stake in IRCTC has now come down to 67.4 percent.

The government had set the floor price of the OFS at Rs 1,367. However, most bids came around Rs 1,378, data released by stock exchanges showed. Shares of IRCTC closed at Rs 1,425 on Friday. 

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. 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.

The backdrop

This is the third OFS undertaken by DIPAM in financial year 2020-21. Earlier, the government offloaded 14.82 percent in Hindustan Aeronautics Ltd (HAL) and 12.82 percent in Bharat Dynamics Ltd (BDL) through OFS, raising Rs 4,924.23 crore and Rs 771.46 crore, respectively, in the process. DIPAM also launched an initial public offer (IPO) of Mazagon Dock Shipbuilders Ltd, which yielded Rs 442.79 crore. The disinvestment target for FY2020-21 is Rs 2.1 lakh crore. And DIPAM has so far raised only Rs 6,533.11 crore. Since the progress in big-ticket disinvestment plans for the year has been slow, the government is relying on minority stake disinvestments through OFS, IPO and share buyback to net as much as possible.

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