Even as the buzz around IRCTC IPO grows louder, two more railway public offers may reportedly hit stock markets soon as the government is looking to divest stake in railway PSUs. DIPAM (Department of Investment and Public Asset Management) and the Railway Ministry is in advanced talks to launch public offer of two railway PSUs– RailTel and (IRFC Indian Railway Finance Corporation), ET Now reported citing government sources. The government looks to divest about 15% stake in FY20, to raise a total of about Rs 1,500 crore from the IPOs of IRCTC, RailTel and IRFC, the channel reported. Notably, IRFC is a finance arm of the Indian Railway, which raises financial resources for expansion and running through capital markets and other borrowings. RailTel is a “Miniratna” (public sector) enterprise focused on providing broadband and VPN services.
The development comes after the Cabinet Committee on Economic Affairs had approved listing of five railway companies — IRCON international, RITES, RVNL, IRFC and IRCTC in April-17. Out of these five, IRCON international and RITES were listed in 2018-19. The government had raised about Rs 466 crore through another railways arm Rail Vikas Nigam Ltd (RVNL) — in the first IPO of the fiscal year, by divesting 12.12% stake. Through the upcoming IRCTC IPO, the DIPAM is eyeing Rs 645 crore. Through the blockbuster RITES IPO the government raised about Rs 460 crore, while IRCON fetched about Rs 467 crore.
The much awaited IRCTC IPO hits the streets next week. The railway PSU public offer will remain open for subscription between September 30th and October 3rd. The government looks to raise to raise up to Rs 645.12 crore at the higher end of the price band. IRCTC has set a price band of Rs 315-320 for its intended share sale. Interestingly, a discount of Rs 10 per share is being offered to retail investors and employees. The minimum bid lot has been fixed at 40 shares, and in multiples of 40 shares thereafter.
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