IRCTC may launch IPO on 30 September as buoyancy returns to stock markets post-corporate tax cut; hopes to raise up to Rs 600 cr

Indian Railways’ subsidiary IRCTC is expected to launch its maiden offer by the end of this month in the wake of the surge in the stock markets post-corporate tax cut announced by the government on Friday, said media reports. Indian Railway Catering and Tourism Corporation (IRCTC) may launch initial public offering (IPO) on 30 September and the government is expected to raise about Rs 480 crore through the proposed initial share sale, said a report in Mint. In August this year, a PTI report had said that the IPO would be worth about Rs 500-600 crore. [caption id=“attachment_4268281” align=“alignleft” width=“380”] Representational image. News18[/caption] The maiden share sale plan of IRCTC, the tourism and catering arm of Indian Railways, comes in the wake of a major surge in the stock markets after Finance Minister Nirmala Sitharaman announcement sharp cut in corporate tax rates in a bid to revive the slowing economy, said the report in Mint. In the rally on Friday and Monday, Sensex posted its biggest two-day gains of 2,996.56 points or 8.30 percent, while the 50-share Nifty soared 895.40 points or 8.36 percent. Sensex logged its biggest single-day jump in over a decade by surging 1,921.15 points or 5.32 percent while Nifty zoomed 569.40 points or 5.32 percent soon after Sitharaman announced the corporate tax cut. About 2 crore equity shares of face value of Rs 10 each would be offloaded through the offer for sale by the government. The details of the IPO, including price band and bid lot, may be announced on Wednesday, said a report in Financial Express. Last month, IRCTC had filed draft papers with markets regulator Securities and Exchange Board of India (SEBI) for its IPO. IDBI Capital Markets & Securities, SBI Capital Markets and YES Securities (India) are the managers to the offer. 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 generated Rs 1,957 crore revenue during FY19, a rise of 25 percent from the previous fiscal, the firm’s DRHP stated. The PSU’s net profit jumped 23.5 percent on-year to Rs 272.60 crore during fiscal 2019. The CPSE has also diversified into other business segments like e-catering, executive lounges and budget hotels. — With PTI inputs