INSUBCONTINENT EXCLUSIVE:
IRCTC IPO is part of government's process to meet divestment target of Rs 80,000 crore this fiscal.IRCTC IPO: Indian Railway Catering and
Tourism Corporation (IRCTC) saw huge demand for its shares in the initial public offering (IPO) which closed on Thursday
IRCTC's IPO to raise Rs 645 crore was subscribed close to 112 times by the end of the bidding process on Thursday, data compiled by the
National Stock Exchange showed.Investors bid for over 225 crore shares of the company, compared with 2.02 crore shares on the offer,
according to data from the National Stock Exchange, as of 6:00 pm on Thursday
As per the data on NSE, IRCTC received bids worth Rs 72,000 crore at the upper price band.IRCTC is authorised by the railway ministry to
sell Indian railway tickets online, offer catering service and manufacture and supply packaged drinking water at railway stations and on
trains across India.IRCTC operates in four business segments and also offers e-catering services to passengers via its mobile phone
application."IRCTC could see better valuation and a jump in EPS from second half of FY20 due to restoration of service charges which were
halted after demonetization and the recently announced corporate tax rate-cut," Deepak Jasani, head of retail research at HDFC Securities
told Reuters."It is also partly in the internet space and such companies are witnessing heightened investor interest."The IPO is part of the
government's divestment process to help meet its target to raise Rs 80,000 crore this fiscal year
In January, sources told Reuters that the government plans to meet this target through the sale of state-owned assets.The government will
hold a 87.4 per cent stake in IRCTC after the IPO.Earlier this year, government-run Rail Vikas Nigam Ltd and MSTC Ltd failed to garner as
much attention as IRCTC, but were fully subscribed at the end of the subscription period.The issue for IRCTC, which also handles holiday
packages and pilgrimage tours for the Indian railways, comprises an offer for sale of 2.02 crore shares in a price band of Rs 315-320 per
share.IRCTC will not receive any proceeds from the offer and all proceeds will go to the government, according to the red herring
prospectus.The overwhelming response comes amid slowing growth in Asia's third-largest economy, which has hit sales of everything from
cars to cookies, prompting the government to step in with deep cuts in corporate taxes and a raft of other measures to revive growth.Get
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