IRCTC’s initial public offer (IPO) of the state-owned Indian Railway Catering and Tourism Corporation (IRCTC) was fully subscribed on October 1, the second day of subscription. IRCTC IPO is getting continued support from retail investors and saw the issue being subscribed 2.07 times.

IRCTC or Indian Railway Catering and Tourism Corporation, the online ticketing arm of the Indian Railways plans to raise up to Rs. 645 crore through the IPO, which opened for subscription on Monday and closes on Thursday, October 3. The IRCTC IPO is the largest of all the railway offerings so far. There are three other listed entities associated with the Railways: Rail Vikas Nigam, Rail India Technical and Economic Service (RITES) and Indian Railway Construction Company (IRCON).

IRCTC IPO Subscription Status

By 10:30 am, bids for 2,17 crore shares were received out of the total 2.02 crore shares on offer under the IRCTC IPO, data from the National Stock Exchange showed. That marked a subscription of 107.58 per cent.

IRCTC IPO Issue Size

IRCTC is selling 2.01 crore shares under the IPO. At the upper end of the price band, the company is valued at Rs. 5,120 crore, and Rs. 5,040 crore at the lower end, according to Axis Capital.

IRCTC IPO Issue Price

IRCTC has set an issue price of Rs. 315-Rs. 320 for the IPO.

Half of the total shares on offer are reserved for qualified institutional investors, 35 per cent for retail investors and 15 per cent for non-institutional buyers.

It is a zero-debt company with RoE/RoCE of 42/59 percent, cash-on-books of Rs 1,110 crore and dividend payout ratio at 60 percent. Its incremental capex planned from FY21 to FY23 is Rs 180-200 crore, mainly to increase drinking water capacity and IT backend operations.

At the upper end of the price band, IRCTC demands PE multiple of 18.8x of FY19 EPS and the recent tax reduction by the government to 25.2 percent and an increase in revenue from service charge for online ticketing will improve profitability, said Angel Broking which also advised subscribing the issue.

The internet ticketing segment contributed 12.35 percent to its FY19 revenue against 13.63 percent the previous year. The catering business accounted for 55 percent of the revenue against 48.70 percent last year. Packaged drinking water counted for 9.28 percent revenue against previous year’s 11.13 percent, while travel and tourism 23.38 percent against 26.54 percent.

IDBI Capital Markets & Securities, SBI Capital Markets and YES Securities (India) are the lead managers to the offer.

(With input from agencies)