Why is the government planning to sell further stake in IRCTC?

There are two reasons for decision to sell further stake in IRCTC. Firstly, the government needs to sell some low hanging fruits to raise the divestment corpus. Secondly, government has committed to SEBI to take state holdings in PSUs to 75% mark.

Towards this end the government plans to sell 15-20% stake in IRCTC. Now, IRCTC is the profit making tourism and ticketing unit of Indian Railways. While the company is majority owned by the government, it comes administratively under the Railway Ministry.

The GOI is planning to sell 15% and it will retain the right for an additional 5% based on demand. IRCTC was listed last year and has been a star performer since listing due to the monopoly position it holds and its special business relation with the Indian Railways.

Indian government holds 87.40% in IRCTC currently and this will reduce the stake to below the 75% in line with SEBI norms. It also enables the government to monetize the good performance of the stock in the last one year through the OFS.