InvestorQ : What are the terms of the IRCTC offer for sale by the government?
shrinidhi Rajan made post

What are the terms of the IRCTC offer for sale by the government?

2 years ago

The government has been trying to sell some of its hot cake PSU in a bid to boost its revenues for the financial year FY21. The latest is a bid to sell a 20% stake in IRCTC via an OFS on Thursday and Friday. IRCTC is owned by the government of India but comes under the administration reportage of the Indian Railways.

The total funds proposed to be raised through the OFS will be Rs.4,374 crore approximately. While the non-retail bids will be allowed on Thursday, the retail investors can only put in their bids for the OFS on Friday, which is the 11 of December.

IRCTC had come out with an IPO in 2019 and has been a near 4-bagger since then, considering its virtual monopoly status as the supply of catering and ticketing services to the Indian Railways. Analysts also look at it as a strong play on the ecommerce space with a virtually non-cyclical market place.

The Government of India currently holds 87.4% stake in IRCTC and post the deal their stake will come down below 75%. This is something all the PSU companies have to achieve eventually as per the revised SEBI stipulations. The OFS will help the government inch closer to its full year target of Rs.2.10 trillion, though it is a far cry without the LIC IPO.