Floor price for the Offer for Sale has been set at Rs 680 per share, which is a 7.5 percent discount to Wednesday’s closing price.
Shares of state-run Indian Railways Catering and Tourism Corporation (IRCTC) dropped as much as 5 percent on Thursday after the government announced that it will sell up to 5 percent stake in the unit that provides ticketing, catering and tourism services, through an Offer for Sale (OFS).
Base offer will be for 2 crore share or 2.5 percent of the total equity with a greenshoe option of another 2.5 percent stake. Floor price for the Offer for Sale has been set at Rs 680 per share, which is a 7.5 percent discount to Wednesday’s closing price of Rs 734.9.
A complete subscription of the OFS, including the greenshoe option at floor price would fetch the government a sum of Rs 2,720 crore.
Based on the September quarter shareholding pattern, the government holds 67.40 percent stake in the company.
Gurmeet Chadha of Complete Circle called IRCTC a stock that has a lot of potential but has failed to take off the way it should.
“I think we have to figure out a way to monetize this traffic they have on the on the portal in terms of either marketing or upsell and cross sell opportunities for a bigger re-rating, he told CNBC-TV18. “If they can do that there’s a lot of potential there. But with the OFS now, there could be maybe some near-term pressure but remains a very, very good stock, you know, one of the better stocks in the PSU basket.”
The government has set a disinvestment target of Rs 65,000 crore for the current financial year.
Shares of IRCTC have declined 13.3 percent so far this year.