Govt to sell up to 5% stake in IRCTC via OFS; floor price fixed at Rs 680 per share

Government on Wednesday announced sale of up to 5% stake in IRCTC through an offer for sale. Floor price has been fixed at Rs 680 per share, at nearly 7.5% discount from the scrip's close of Rs 735 on Wednesday. 

At that price, offloading 5% of IRCTC could fetch around Rs 2,720 crore, a Reuters estimate showed.

The OFS has base size of 2.5% and a greenshoe option of 2.5%. 

IRCTC OFS for non-retail investors will open on December 15 and for retail on December 16.

"Indian Railway Catering and Tourism Corporation Ltd proposes to sell up to 2,00,00,000 (2 crore) equity shares of the Company, (representing 2.5% of the total issued and paid up equity share capital of the Company) with an option to additionally sell 2,00,00,000 (2 crore) equity shares," said IRCTC in a stock exchange filing. 

IRCTC's revenue had ''reduced drastically'' by almost 64% during 2020-21 as compared to 2019-20 due to Covid-related travel restrictions, Railway Minister Ashwini Vaishnaw said on Wednesday. He added that the revenue increased gradually after the situation normalised.

Replying to a query in Lok Sabha, Vaishnaw said in 2019-2020, the Indian Railway Catering and Tourism Corporation earned Rs 2,342.41 crore, which went down to Rs 861.64 crore during the Covid-affected 2020-21. In 2021-22, the IRCTC earned Rs 1,952.30 crore. ''Revenue during FY 2020-21 has reduced drastically as compared to FY 2019-20 due to travel restrictions imposed during Covid-19 by the Government of India. However, after lifting of restrictions and starting of cooked food in trains during FY 2021-22, the revenue again gradually increased,'' he said.

He also said the estimated number of rail passengers who have used IRCTC for booking train tickets during 2019-2020 is 5,229 lakh, followed by 3,052 lakh in 2020-21, and 7,343 lakh in 2021-22. In the current fiscal, till October 31, 4,607 lakh passengers have booked tickets through IRCTC, he said.

IRCTC is the only firm authorised by the Indian Railways to manage food services on trains and offer online railway ticket booking services.

In nearly nine months of the current financial year, the Indian government has not been able to meet even half of its Rs 65,000 crore budgeted divestment target due to delays in privatising some state-owned firms including Shipping Corporation of India and BEML.