State-owned Indian Railway Catering and Tourism Corporation (IRCTC), oversubscribed 111.85 times, emerged as one of the most sought after initial public offerings (IPOs) among public-sector undertaking (PSU) IPOs ever
While portions allocated for qualified institutional buyers were oversubscribed 108.79 times, retail investors 14.65 times and employees 5.79 times, the IPO was most in-demand among non-institutional investors who oversubscribed it 354.52 times.
This made it one of the most successful IPOs ever, followed by Housing and Urban Development Corporation Ltd. which was a far second as it was oversubscribed a total of 79.5 times two years ago. Others such as Cochin Shipyard Ltd. and RITES Ltd. were also oversubscriptions of 76x and 67x respectively.
The railway ticketing, tourism and catering firm mopped up ₹645 crore via the IPO for the government, which offloaded up to 20 million shares or its 12.5% stake in the firm at a price band of ₹315-320 per share.
The company, incorporated by the government in 1999, was conferred the Miniratna (Category-I Public Sector Enterprise) status on May 1, 2008.
Its proposed listing on the stock bourses is part of the government’s disinvestment plans, as it aims to raise ₹1.05 trillion from divestments in the current financial year, up from ₹80,000 crore it had budgeted in the last fiscal.
In April 2017, the central government approved listing of five railway entities—IRCON International Ltd., RITES Ltd., Rail Vikas Nigam Ltd, IRFC Ltd. and IRCTC Ltd. Of this, four except IRFC have already been listed.
IRCTC is the second railway company to get listed on the exchanges this year amid a market lull. So far this year, only eight companies have gone public to raise around ₹5,509 crore. In comparison, last year saw 24 IPOs worth ₹30,959 crore, according to data from primary market tracker Prime Database.
The government's divestment plan included listing of profitable CPSEs, minority stake sales, strategic disinvestments, buybacks of shares and exchange traded funds (ETFs).
In fiscal year 2018-19, the government raised about ₹85,000 crore, exceeding its budgeted target. While it raised ₹62,900 crore via IPOs, buyback of shares, ETFs and their further fund offers (FFOs), ₹15,913 crore was raised through strategic divestments and ₹6,157 crore came from sale of shares in private listed firms that it held through Specified Undertaking of Unit Trust of India (SUUTI).