The initial public offering (IPO) of Indian Railway Catering and Tourism Corp has received a strong response from ; investors, witnessing a subscription of 3.25 times on the second day of bidding on Tuesday.
The government is offering 2 crore equity shares or 12.6% stake through this IPO. Post-IPO, the government’s stake will fall to 87.4%.
The strong demand has been attributed to “reasonable valuation” at which IRCTC shares are being offered. Many analysts have recommended “subscribe” to IRCTC IPO, citing attractive valuation and the company’s monopoly position in providing packaged drinking water, catering, online ticket booking services to passengers travelling by Indian Railways.
IRCTC is offering shares at ₹315-320 per share but retail investors get a discount of ₹10 per share.
So the effective price band of IRCTC IPO for retail investors is ₹305-310 per share. Alankit Assignments Limited is the registrar to the IRCTC IPO.
The lot size of IRCTC IPO is 40. So at the price band of ₹305-310 per share for retail investors, one lot will cost ₹12,200-12,400.
IRCTC IPO allotment date and listing date
Allotment date: 9 October (tentative).
Listing on BSE and NSE: 14th October (tentative)
Many other brokerages such as SAMCO Securities, ICICI Securities, Angel Broking, Canara Securities, and Prabhudas Lilladher have recommended a subscribe to IRCTC IPO, citing attractive valuation and its monopolistic nature of the business and asset-light model.