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IRCTC IPO subscribed a whopping 112 times

In all, IRCTC received bids worth Rs 72,000 crore at the upper price band, data on NSE showed

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Indian Railway Catering and Tourism Corporation's (IRCTC) initial public offer (IPO), that closed for subscription on Thursday, received tremendous response from investors. The public issue to raise Rs 645 crore was subscribed around 112 times, as per data on the National Stock Exchange (NSE).

The issue received investor bids for over 225 crore shares against 2.02 crore shares on offer. In all, IRCTC received bids worth Rs 72,000 crore at the upper price band, data on NSE showed.

Subscription from retail investors and employees stood at 14.36 and 5.74 times, respectively. The portion for non-institutional investors was bid 354.51 times while the reserved part of qualified institutional investors was subscribed 108.79 times.

The IPO price band was fixed at Rs 315-320 per share and of the total issue size, 1.6 lakh equity shares are reserved for eligible employees. The company employees and retail investors will receive shares at a 10% discount to the final offer price.

The government's shareholding in the Railways' tourism and catering subsidiary will be reduce to 87.40%

All brokerages had recommended investors to subscribe to the IPO considering IRCTC's strong earnings, attractive valuations, asset light business model, big customer base and healthy dividend payouts.

"Based on FY19 consolidated numbers, the issue is priced at a P/E of 19x. The company is likely to benefit from i) monopolistic nature of business, ii) significant growth over FY19-21 iii) an asset-light business model with healthy dividend payouts, and iv) strong parentage. Thus, investors can subscribe to the IPO," Motilal Oswal said in its note.

IRCTC is the only entity authorised by Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India.

SBI Capital Markets, IDBI Capital Markets & Securities and YES Securities (India) were the book running lead managers to the issue.

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