Centre to offload up to 5% stake in IRCTC via OFS, floor price fixed at ₹680

The floor price has been fixed at ₹680 a share, at a discount of more than 7% as compared to today’s closing price of ₹733.50.

At that price, offloading 5% of IRCTC could fetch around ₹2,720 crore, according to estimates.

The government is planning to sell a 2.5% stake, with an option to additionally offload 2.5%. Up to 4,00,00,000 equity shares will be offered in the state-owned firm’s OFS, the PSU said in a regulatory filing.

“The offer shall take place on a separate window of the stock exchanges on December 15, 2022 (T day) and December 16, 2022 (T+1 day), from 9:15 am to 3:30 pm (Indian Standard Time) on both days,” IRCTC said in a statement.

The number of shares being offered in the OFS is equivalent to up to 0.5% of the total paid-up equity share capital of the firm.

Axis Capital, Citigroup Global Markets, Goldman Sachs and JM Financial are brokers for the OFS.

OFS for non-retail, retail investors

Only non-retail investors will be allowed to place their bids on T day (December 15). The offer shall take place during trading hours on a separate window of the stock exchanges tomorrow, commencing at 9:15 am and close at 3:30 pm on the same day.

“Those non-retail investors who have placed their bids on T day and have chosen to carry forward their bids to T+1 day, shall be allowed to carry forward and also revise their bids on T+1 day as per the OFS Guidelines,” the statement read.

For retail investors, the OFS will take place during trading hours on a separate window of the stock exchanges on T+l day, i.e., December 16, 2022 commencing at 9:15 am and end on the same day at 3:30 pm.

Retail investors will be able to place their bids on December 16. The non-retail investors who have placed their bids on T day and have chosen to carry forward their unallotted bids to T+l day, will also be allowed to revise their bids on T+l day.

For the quarter ended September 2022, IRCTC’s net profit after tax from continuing operations surged to ₹226 crore, up 42.5%. However, on a sequential-basis, the company’s profit dropped 7.7% from ₹245.5 crore recorded in the previous quarter (Q1FY23).

This is part of the government’s disinvestment target for the year. The Centre aims to raise ₹65,000 crore through divestment in fiscal 2022-23.

Last month, the government received ₹3,839 crore from the sale of Axis Bank Ltd (AXBK.NS) shares held by a government-investment vehicle.

IRCTC is the tourism and catering arm of the Indian Railways. At present, the government owns 67.4% stake in IRCTC.

IRCTC has a market cap of ₹58,792 crore. Ahead of the announcement on Wednesday, the IRCTC scrip closed 1.47% higher to settle at ₹733.50 apiece on the NSE.