Indian Railway Catering and Tourism Corporation (IRCTC) saw huge demand for its shares among investors in the initial public offering (IPO) on the final day of bidding on Thursday. IRCTC’s IPO to raise Rs. 645 crore was subscribed close to 111.91times by the end of the bidding process on closing day, 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.
The IPO is part of the government’s divestment process to facilitate meet its target to raise Rs. 80,000 crore during this fiscal year. The government is going to hold a 87.4 per cent stake in IRCTC after the IPO.
Previously, 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 great response comes in the midst of 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.
