The initial public offering (IPO) of Indian Railway Catering and Tourism Corp has received a strong response from investors, witnessing a subscription of 3.25 times on the second day of bidding on Tuesday.
The IRCTC IPO had received bids for 65,574,200 shares against the total issue size of 20,160,000 as of 5:30 PM, according to provisional data available on exchanges.
Retail individual investors have bid for 43,370,920 shares which is 6.2 times the allocated offered shares. Qualified institutional buyers (QIBs) have subscribed 1.65 times while non-institutional investors have subscribed 1.73 times.
At the end of the first day of subscription on Monday, the IRCTC IPO was subscribed 81 percent.
The IRCTC IPO, which will close on October 3, is priced between Rs 315 and Rs 320 per share. The retail investors and employees will get shares at a discount of Rs 10 per share to final offer price.
Most brokerages have recommended ‘subscribe’ recommendation on the IRCTC IPO, given its reasonable valuation and monopoly in the Indian railways.
The analysts also note that the key risk and concerns for the company remain change in the policy of Ministry of Railways could impact financials, competition could pose a risk to its monopoly position, and stricter regulatory requirements for use of plastic.
The share sale 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 an additional employee reservation portion of 1.6 lakh shares, taking the total offer size to 12.6 percent of total paid-up equity.
IDBI Capital Markets & Securities, SBI Capital Markets and YES Securities (India) are the managers to the IRCTC IPO.
Indian stock markets will be closed on Wednesday on account of 'Mahatma Gandhi Jayanti'.
IRCTC shares will be listed on the BSE and the NSE.
First Published: IST