The government plans to sell about 15-20% stake in IRCTC via offer for sale and would like to complete the transaction in minimum number of tranches.
The exact details will be shared with the selected merchant bankers, DIPAM said
NEW DELHI :
The government plans to sell about 15-20% stake in IRCTC via offer for sale (OFS) and would like to complete the transaction in minimum number of tranches.
Last month, the Department of Investment and Public Asset Management (DIPAM) had invited bids from merchant bankers by September 10 for managing the sale in Indian Railway Catering and Tourism Corp (IRCTC).
Asked if payment would be made by the government to merchant banker after completion of every single tranche or cumulatively after the completion of entire transaction, DIPAM said, "GOI would not like to have an OFS overhang and hence would like to complete the transaction in minimum number of tranches as advised by merchant bankers based on market conditions.
"In case more than one tranche is used, pro-rata payment would be made to the merchant bankers".
IRCTC, the only entity authorised by Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India, was listed on stock exchanges in October 2019.
The company had raised ₹645 crore through the IPO.
IRCTC OFS would help the government inch forward towards meeting the ₹2.10 lakh crore disinvestment target for ongoing fiscal.
Of this, ₹1.20 lakh crore is to come from disinvestment of public sector undertakings and ₹90,000 crore from stake sale in financial institutions.
However, DIPAM has not been able to sell stake in any CPSE so far in the current fiscal as the coronavirus outbreak has impacted equity markets.
However, the government has garnered subscription worth ₹11,000 crore for 'AAA' rated bonds of CPSEs through Bharat Bond ETF-II.
The government is also looking at launching initial public offering (IPO) of Indian Railway Finance Corp Ltd (IRFC), and had filed draft red herring prospectus (DRHP) with the Securities and Exchange Board of India in January for IPO of over 140 crore equity shares.
The Union Cabinet had in April 2017 approved listing of five railway companies.
While four of them -- IRCON International Ltd, RITES Ltd, Rail Vikas Nigam Ltd and IRCTC -- have already been listed, IRFC is likely to be put on block this fiscal.
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