The Union government is going to divest up to 20 per cent stake in Indian Railway Catering and Tourism Corp (IRCTC) through an Offer for Sale (OFS), which opened for subscription today.
It will be selling up to 2,40,00,000 equity shares, constituting up to 15 per cent stake, with an option to additionally divest five per cent of the total issued and paid up equity share capital, adding up to 80,00,000 shares.
"Offer for Sale in IRCTC opens tomorrow for Non Retail investors. Day2 for retail investors. Govt. would divest 15 per cent equity with a 5 per cent green shoe option," tweeted Secretary, DIPAM on Wednesday.
Offer for Sale in IRCTC opens tomorrow for Non Retail investors. Day2 for retail investors. Govt. would divest 15% equity with a 5% green shoe option. pic.twitter.com/0QEgiMfp9d— Secretary, DIPAM (@SecyDIPAM) December 9, 2020
It owns 87.40 per cent stake in IRCTC and is selling its shares to lower its stake in the company to 75 per cent. The move has been made in order to meet the Securities and Exchange Board of India’s public holding norm.
In the wake of the announcement of the government selling 20 per cent stake, share price of IRCTC dipped 13 per cent intraday today, reported moneycontrol.com. IRCTC shares on Wednesday closed at Rs 1,618.05 apiece on the BSE, registering a decline of 1.55 per cent from its previous close.
The floor price for the offer stands at Rs 1,367. The government is expected to raise Rs 4,374 crore by selling total 3.2 crore shares. The amount received from the stake sale will help improve the government’s treasury starved of funds due to the COVID-19 crisis.
The money raised will also help the government moving towards the Rs 2.10 lakh crore disinvestment target. The Centre has planned to garner Rs 1.20 lakh crore from disinvestment of public sector undertakings and Rs 90,000 crore from stake sale in financial institutions.
The Union Cabinet in 2017 gave its node to list five railway companies. Four companies - IRCON International Ltd, RITES Ltd, Rail Vikas Nigam Ltd and IRTC - have already been listed, while the remaining firm, IRFC, is likely to be put on the block this fiscal.
IRCTC provides catering services, online railway ticket service and packaged drinking water at railway stations and trains in India. The company had garnered Rs 645 crore through the IPO last year.