The state-owned Indian Railway Catering and Tourism Corporation (IRCTC), a subsidiary of Indian Railways, will today take over the market with its initial public offering (IPO). It will probably be the largest IPO issued by IR subsidiaries, at Rs 635-645.
IPO is a financial instrument through which an unlisted company offers shares to the public. Funds raised are used for a variety of purposes, such as working capital, debt repayment and acquisition.
Here are the details of the IPO:
- A subsidiary of Indian Railways IRCTC has reportedly set the price of the group's initial offer to sell shares between 315 and 320 mines per share, the media report said.
- The issue includes an offer to sell 2,01,60,000 shares of 10 RS. Of this, 1,60,000 shares are reserved for employees
- The minimum bid is 40 stocks and in multiples of 40 stocks thereafter
- IPO revenues will go directly to the government
- The total dilution of the shares is 12.60 percent of the paid up capital of ICTTK
- Government plans to raise up to 645 kronor at the price of the group through IPO, which will close on 3 October
- Last month, ICTY submitted draft documents to the Securities and Exchange Board of India (SEBI) regulator for its IPO
- IDBI Capital Markets and Securities, SBI Capital Markets and YES Securities (India) are supply managers.
IRCTC operates one of the most prominent web site transactions (www.irctc.co.in) in the Asia-Pacific region with transactions averaging 2.5 to 2.8 core transactions per month over the 5 months ending on August 31.
IRCTC, a profit-making entity of Indian Railways, reported net profit of Rs 272.6 in FY19 and Rs 220.62 in K18. The company's earnings rose to 1,867.88 RSK in FY19 from 1,470.46 rubles in PF18.
The IRCTC is the only entity authorized by Indian Railways to provide railway catering services, network train tickets and packaged drinking water to railway stations and trains in India, according to the draft Red Herring Prospectus (DRHP).
The IRCTC generated revenue of Rs 1,957 during FY19, a 25 percent increase over its previous fiscal year, the firm's DRHP said. PSU's net profit jumped 23.5 per cent year-on-year to Rs 272.60 during fiscal 2019.
Currently, ICTY operates in 4 business segments, namely Internet Tickets, Catering, Packaged Drinking Water under the 'Non Railway' brand and Travel and Tourism.
Earlier this year, IRCTC launched its own payment aggregator system, IRCTC iPay to provide digital payment options over the Internet to travelers using online travel-related services through the IRCTC website.
IRCTC has also diversified into other businesses, including non-train catering and services such as e-catering, executive lounges and budget hotels.
Internet ticketing is currently 12-13 percent of revenue and has a margin of about 60-65 percent, said Mahendra Pratap Mall, president and CEO of IRCTC. CNBC-TV18.
CPSE has also diversified into other business segments such as e-catering, executive lounges and budget hotels.
Three other subsidiaries of Indian Railways that came up with the IPO are: Vikis Nigam Railway Limited (RWNL), RITES (Railway Technical and Economic Service of India) and IRKON (Indian Railway Construction Company Limited), announced HANS.
The size of RVNL's public offering was Rs 477.11 crore, IRCON Rs 466.93 crore and RITES Rs 460.44 crore.
– With inputs from agencies