IRCTC: The Offer for Sale (OFS) of the Indian Railway Catering and Tourism Corporation (IRCTC) has received a resounding response from non-retail investors on the first day. On the first day, almost double the size bids have been received in this category. On the first day it was subscribed 198 percent. Today, in this OFS, retail investors have the opportunity to buy shares at a discount of around 16 per cent. Explain that the floor price of Rs 1367 was kept for the sale offer on Wednesday, while the IRCTC stock closed at Rs 1618 on that day.
Subscriptions for 4,27,68,445 equity shares on day one
Subscription received for 4,27,68,445 equity shares in non-retail categories on the first day of OFS. While the base offer size was 2,40,00,000 shares in this category. There is a plan to sell up to 20 per cent stake in IRCTC through Offer for Sale, which is expected to fetch Rs 4,374 crore. The government will sell 15 percent stake in it with a 5 percent green shoe option. As per the information provided by the regulatory filing, the promoters plan to sell 2,40,00,000 equity shares through OFS which is 15% of the total stake. At the same time, it also has the option of additional sales of 80,00,000 shares, which is 5 percent of the total stake.
Retail investors have a chance today
Department of Investment and Public Assets Management (DIPAM) Secretary Tuheen Kant Pandey said that retail investors will get the opportunity to bid for IRCTC’s Sale Offer (OFS) today i.e. 11 December 2020. The government holds 87.40 percent stake in the company. Under the guidelines of Capital Market Regulator SEBI (SEBI), the government will have to reduce its stake in the company to 75 percent.
Chance to buy shares at a discount
The floor price fixed by the government is 16 percent less than the IRCTC closed on Wednesday. That is, investors will get the opportunity to invest with a 16 percent discount. Explain that the shares of the company closed on Wednesday at a price of Rs 1618. A floor price of Rs 1367 has been kept for the sale offer on Wednesday. IRCTC launched its IPO in October 2019. This IPO was taken over by investors and it received tremendous response. Its price band was Rs 320 and in just 4 months it reached the price of Rs 1995. However, it declined during the period of the Corona epidemic.
What is OFS
OFS is the only way to sell shares. This gives promoters of already listed companies a way to easily issue shares. This issue is issued only among the existing shareholders. Apart from retail investors, it can be issued to all types of investors including mutual fund investors, foreign institutional investors, insurance companies, corporate, NRIs. Any company that wants to issue OFS has to inform it two days before the issue.