- IRCTC IPO was subscribed 112 times
- This is the second company in almost two years after Amber Enterprises and Apollo Micro Systems to cross 100 times oversubscription.
- This is much higher than the response received by HUDCO (79.47 times) and Cochin Shipyard (76.19 times) in 2017.
The initial public offering of the Rs 645-crore of the state-owned Indian Railway Catering and Tourism Corporation (IRCTC) has been subscribed nearly 112 times, making it the most profitable share sale in 20 months.
Led by demand from institutions and rich investors, the IPO received bids for 225.6 crore shares compared to the total issuance size of 2.02 crore shares, NSE data showed. This makes it the best subscribed IPO since the 250.7-times subscribed Apollo Micro Systems and 115.3-fold subscribed Amber Enterprises India. In January 2018, both IPOs were released.
The portion reserved for QIBs (Qualified Institutional Buyers) has been subscribed 108.8 times, while the portion of HNI has been subscribed 354.5 times. The portion of retail and staff has been subscribed 14.6 times and 5.8 times. Retail investors and employees will receive shares at the final offer rate at a discount of Rs 10.
The company set up a Rs 315-Rs 320 price range for the IPO.
IDBI Capital Markets & Securities, SBI Capital Markets and YES Securities (India) were the lead portfolio managers of the bid, representing 12.6% of the total paid-up capital.
IRCTC IPO has evoked tremendous reactions from all categories of shareholders, with more than 111 subscriptions to the issue. The problem which divested 12.6 percent of GoI’s CPSE stake is expected to generate Rs 645 crore revenue. It’s the 2nd CPSE to be listed this tax, “tweeted on Thursday night from the Department of Investment and Public Asset Management (Dipam).
“The grey market premium of Rs 200 catches the business value. According to Geetanjali Kedia, senior research analyst at SPTulsian.com, further gains will depend on how the company ramps up its e-ticket service, how its private train venture ramps up and when new water bottling plants come up. The list should be approximately Rs 520-Rs 525,” Kedia said.
Brokerages like IndiaNivesh Securities, ICICIdirect, BP Equities, Angel Broking, Phillip Capital and Anand Rathi gave the issue ahead of the IPO a subscription ranking. Due to the competitive pricing and monopoly aspect of the industry of the company, IRCTC IPO gained attention.
IRCTC is the only body approved to provide services by the Indian Railways. This gives it the benefits of increasing market share in e-ticketing, packaged drinking water, and e-catering.