Indian Railway Catering and Tourism Corporation (IRCTC), the railways’ online ticketing, tourism and catering arm, plans to enter the capital market with an initial public offer of ₹645 crore.
The public issue will open for subscription on September 30 and close on October 3. The company is the only entity authorised by the Ministry of Railways to provide catering services to the railways, offer 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 will lead to the holding by the government — which holds the stake through Ministry of Railways — declining from the current 100% to 87.5%. The company will offer nearly 2.02 crore shares in the price band of ₹315 to ₹320 each.
The company will also be offering a discount of ₹10 on each share to applicants in the retail and employee categories.
Since this is an offer for sale by the government, IRCTC will not be receiving any proceeds from the issue.
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%).
53 million users
Incidentally, the IRCTC ticketing website has more than 53 million registered users and about 8.4 lakh tickets are booked daily with the annual transaction value pegged at ₹36,000 crore.
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 ₹220.62 crore. The company, which is completely debt-free, had cash reserves of ₹1,140.04 crore as on March 31, 2019.
