IRCTC’s share price falls more than 3% on the second day of OFS; tender opens for retail investors

IRCTC’s OFS received a good response from non-retail investors and subscribed to 198 percent on the first day with an indicative price of Rs 1,391.42

IRCTC’s share price fell 3.5 percent to Rs 1,400 apiece in intraday deals on BSE thanks to the ongoing Offer to Sell (OFS). Through this OFS, the government plans to sell up to a 20 per cent stake in IRCTC at a minimum price of Rs 1,367 each. IRCTC’s OFS received a good response from non-retail investors and subscribed to 198 percent on the first day with a target price of Rs 1,391.42. The Secretary of the Department of Investment and Management of Public Assets (DIPAM), Tuhin Kanta Pandey, said that retail investors will have the opportunity to bid on the offer for sale (OFS) of IRCTC on Friday. “We have given this OFS a Neutral rating as there will be a very limited advantage left for retail investors and there is no retail discount on this OFS,” said Yash Gupta, Equity Research Associate, Angel Broking Ltd.

IRCTC shares closed 1.84 percent lower at Rs 1,425.20 each on Friday. The DIPAM secretary said the issue was subscribed 1.98 times the base size at a compensation price above the floor price by non-retail investors. “The government has decided to exercise the green option,” Pandey added. The promoter proposes to sell up to 2.4 crore of IRCTC shares, representing up to 15% stake, with the option to additionally sell 80 lakh of shares, representing 5% of the total issued and paid-up share capital, tIRCTC had said in a regulatory filing. In total, the promoter, the Government of India, will sell Rs 3.2 crore shares, which is expected to generate Rs 4,374 crore for the private treasury of funds due to the COVID-19 crisis.

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In April 2017, the Union Cabinet approved the listing of five railway companies. Of which IRCON International, RITES Ltd, Rail Vikas Nigam Ltd and IRCTC have already been included. IRFC is likely to put this prosecutor on the block, according to a PTI report.

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