Shares of IRCTC rebounded 4.4% today to ₹1,483 today after a four-day decline. Shares were under pressure over the past few sessions after the government on Wednesday announced an offer for sale of its 20% stake in the company. The floor price of ₹1,367 was at a 15% discount to the closing price of Wednesday. The OFS concluded on Friday.
“The OFS of IRCTC closed with strong interest from retail investors and 109.84% subscription. With this, IRCTC is now MPS compliant. We thank all investors for their participation and making the deal so successful,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted. MPS refers to Sebi’s minimum public shareholding norms.
The two-day IRCTC OFS had began on Thursday, with the first day reserved for non-retail investors and the second day for retail investors.
“Offer for Sale of Govt shares in IRCTC got great response on day one. Issue subscribed 1.98 times of base size at a clearing price above the floor price by non- retail investors . Govt has decided to exercise the green shoe option,” DIPAM Secretary Tuhin Kanta Pandey had said earlier in a tweet.
To meet Sebi’s public holding norms, the government has to lower its stake in the company to 75%. The government held 87.40% stake in IRCTC at the end of September quarter.
The government is expected to garner ₹4,374 crore from the Offer for Sale (OFS) of the Indian Railway Catering and Tourism Corp (IRCTC) which closed on Friday.
In the OFS, the government had proposed to sell up to 2,40,00,000 equity shares of IRCTC, representing up to 15% stake, with an option to additionally sell 80,00,000 shares, representing 5% of the total issued and paid up equity share capital.
Domestic brokerage Angel Broking remains positive on IRCTC shares from a long-term perspective but remains cautious in near term. Though post unlocking of the economy business has been recovering gradually for the company and business is expected to recover to pre Covid levels only in FY2022, it said. (With Agency Inputs)
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