Shares of Indian Railway Catering and Tourism Corporation (IRCTC) made a strong debut on the bourses on Monday, surging to over ₹600 apiece — a significant premium over its issue price of ₹320.
On BSE, IRCTC shares were trading at ₹644 at 9:45a.m., which was more than double its issue price even as the benchmark Sensex was only marginal up at 38,234.
At the current trading price, the market capitalisation of the government company is pegged above ₹10,000 crore.
The listing of IRCTC was keenly awaited after its public issue created a record in terms of subscription for a government offering.
The IPO was subscribed nearly 112 times — the first time that a government issue got subscribed over 100 times. The previous record was held by Housing & Urban Development Corporation (HUDCO) who’s IPO in 2017 was subscribed nearly 79 times.
Meanwhile, the IPO of IRCTC witnessed strong demand from all categories of investors. The portion reserved for high net worth individuals was subscribed over 354 times, while that reserved for retail investors got subscribed 14.65 times.
The segment reserved for employees, which historically has seen low subscription numbers, was also subscribed 5.79 times.
Incidentally, the company has offered a discount of ₹10 to applicants in the retail and employees categories.
Institutional investors had also put in large bids with the segment getting subscribed nearly 109 times.
IRCTC is the railways’ online ticketing, tourism and catering arm and the only entity authorised by the Ministry of Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India.
The public offering is part of the government’s disinvestment programme and the public offering will lead to the government – which holds the stake through Ministry of Railways – holding coming down from the current 100% to 87.5%.
IRCTC earns the maxium revenue (55%) from its catering operations followed by travel & toursim (23.38%), ticketing (12.35%) and Rail Neer (9.28%).
For the financial year ended March 31, 2019, the company reported a net profit of ₹272.56 crore, which was higher than the previous year’s net profit of ₹220.62 crore. The company, which is completely debt-free, had cash reserves of ₹1,140.04 crore.