The state-owned Indian Railway Catering and Tourism Corporation (IRCTC) will soon raise funds from the market through an initial public offering (IPO) on September 30. After discussion with merchant bankers, the company has set the price band for its initial public offering at Rs 315-320 per share.
The IPO is set to open for subscription on September 30 and will close on October 3.
The IPO comprises of an offer for sale of 2 crore shares (representing 12.50 percent of total paid-up equity) by the Ministry of Railways. There would also be additional employee reservation portion of 1.6 lakh shares, taking the total offer size to 12.6 percent of total paid-up equity.
The company, which forayed into fintech with its own wallet and payment gateway, iPay, will now experiment with running a regular passenger train of the Indian Railways, Tejas Express, between Lucknow and Delhi.
Following the IPO, the government's stake in IRCTC will come down by 12.5 per cent.
Of the total shares on offer, 50% will be available for allocation to qualified institutional buyers (QIBs), including 2 lakh equity shares for the mutual fund portion on a proportionate basis. In addition, not less than 15% of the offer will be available to non-institutional investor category and at least 35 per cent will be made available to the retail category.
In July, Finance Minister Nirmala Sitharaman had set a disinvestment target of Rs 1.05 lakh crore for FY20, up from Piyush Goyal's interim Budget target of Rs 90,000 crore. The IRCTC IPO is part of the same disinvestment programme.