The initial public offer (IPO) of Indian Railway Catering and Tourism Corporation (IRCTC), which closed for subscription on Thursday, has created a record in terms of the highest-ever subscription for a public issue of a government-owned company.
As per NSE data, the public issue, that aims to raise ₹645 crore, was subscribed nearly 112 times with bids received for 225.61 crore shares against 2.02 crore shares on offer in the price band of ₹315 to ₹320.
As per data from Prime Database, this is the first time ever that an IPO of a public sector undertaking (PSU) has been subscribed more than 100 times. In 2017, the public issue of Housing & Urban Development Corporation (HUDCO) was subscribed nearly 79 times. In the same year, Cochin Shipyard public issue was subscribed 75.59 times.
Last year, the IPO of Rites Ltd. got subscribed nearly 67 times. Meanwhile, the IPO of IRCTC witnessed strong demand from all categories of investors.
The portion reserved for high net worth individuals was subscribed over 354 times, while that reserved for retail investors got subscribed 14.65 times.
The segment reserved for employees, which historically has seen low subscription numbers, was also subscribed 5.79 times. Incidentally, the company will be offering a discount of ₹10 to applicants in the retail and employees’ categories.
Large bids
Institutional investors have also put in large bids with the segment getting subscribed nearly 109 times.
IRCTC is the railways’ online ticketing, tourism and catering arm and the only entity authorised by the Ministry of Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India.
The public offering is part of the government’s disinvestment programme and the public offering will lead to the government — which holds the stake through Ministry of Railways — holding coming down from the current 100% to 87.5%.
IRCTC earns the maximum revenue (55%) from its catering operations followed by travel and tourism (23.38%), ticketing (12.35%) and Rail Neer (9.28%).
For the financial year ended March 31, 2019, the company reported a net profit of ₹272.56 crore, which was higher than the previous year’s net profit of ₹220.62 crore.
The company, which is completely debt-free, had cash reserves of ₹1,140.04 crore as on March 31, 2019.
