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IRCTC IPO opens for subscription on September 30: All you need to know

IRCTC IPO opens for subscription on September 30: All you need to know

IRCTC IPO opens for subscription on September 30: All you need to know
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By CNBC-TV18 Sept 27, 2019 12:19:24 PM IST (Updated)

The IRCTC IPO will open for subscription on September 30, with a price band of Rs 315 to Rs 320 per share.

Indian Railway Catering and Tourism Corporation (IRCTC), the tourism and catering arm of Indian Railways, plans to raise up to Rs 645 crore through an initial public offering. The IRCTC IPO will open for subscription on September 30, with a price band of Rs 315 to Rs 320 per share. The IRCTC is a central public sector enterprise owned by the government under the administrative control of the Ministry of Railways. After RITES, Rail Vikas Nigam and IRCON International, IRCTC is the fourth entity of the Indian Railways to be listed since 2018. The IPO will close on October 3.

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Here are key things you need to know about the IRCTC IPO:
*
The IRCTC IPO comprises 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 issue price is fixed in a range of Rs 315 to Rs 320 per share. The retail investors and employees will get shares at a discount of Rs 10 per share to final offer price.
* The minimum bid lot is 40 equity shares and in multiples of 40 equity shares thereafter.
IDBI Capital Markets & Securities, SBI Capital Markets and YES Securities (India) are the managers to the IRCTC IPO.
* IRCTC is the only entity authorised by the Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India, according to the draft red herring prospectus (DRHP).
* IRCTC operates one of the most transacted websites (www.irctc.co.in), in the Asia-Pacific region with transaction volume averaging 2.5 to 2.8 crore transactions per month during the 5 months ended August 31.
* Currently, IRCTC operates in 4 business segments, namely, Internet Ticketing, Catering, Packaged Drinking Water under the “Rail Neer” brand, and Travel and Tourism.
* Earlier this year, IRCTC has launched its own payment aggregator system, IRCTC iPay to provide online digital payment option to passengers availing online travel-related services through the IRCTC website.
* IRCTC has also diversified into other businesses, including non-railway catering and services such as e-catering, executive lounges and budget hotels.
* The internet ticketing currently is 12-13 percent of the revenue and has a margin of about 60-65 percent, Mahendra Pratap Mall, chairman and managing director of IRCTC, told CNBC-TV18.
* "Cash flow generated is about Rs 1,500-1,600 crore. As per current distribution, catering is almost 53-54 percent and has a margin of 11-12 percent. Tourism is about 28 percent and has a margin of 10-12 percent," he added.
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