New Delhi: The Indian Railway Catering and Tourism Corporation (IRCTC) is expected to launch its initial public offering (IPO) on September 30 and close on October 2. This comes after the IRCTC, in August, had filed the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). Also Read - 'Win-win For 130 Crore Indians', PM Modi Lauds Corporate Tax Cut Announcement, Calls The Move 'Historic'
The IPO’s price band has been fixed between Rs 315-Rs 320. Also Read - IRCTC's Mumbai-Ahmedabad Tejas Express to be on Tracks Soon With Luxurious Amenities
Why the IPO? Also Read - IRCTC Reduces Convenience Fees Charged From Customers For Booking E-tickets
According to reports, the government, through the IPO, wants to bring down its stake in IRCTC to 87.5%, from the current 100%. The government also hopes to offload two crore shares to raise between Rs 500 crore-600 crore. The reports further state that the IPO will be handled by IDBI Capital, SBI Capital Markets and Yes Securities.
The development comes after the country’s stock market rebounded following the government’s announcement, last week, to cut corporate tax.
The Indian Railway Catering and Tourism Corporation is a subsidiary of the Indian Railways which handles the former’s catering, tourism and ticketing operations. Every day it sees between 5,50,000-6,00,000 bookings and has the tagline of ‘Lifeline of the Nation.’ As of 2016, it had a revenue of Rs 1,506 crore (USD 220 million).
It also has more than 30 million (three crore) registered members. It is headquartered in New Delhi.
What is an IPO?
An initial public offering, also called stock market launch, is a type of public offering in which a company’s shares are sold to institutional investors. An IPO is underwritten by one or more investment banks.