IRCTC (Indian Railway Catering and Tourism Corporation) is a subsidiary of Indian Railways that deals with tourism, catering, and online ticket booking services with more than 5 lakh bookings every day.
The government has proposed to sell up to 20% of the stake in IRCTC through an offer for sale. Through this OFS process, the government will sell 2,40,00,000 shares (15% stake) of the company with an option to sell an additional 80,00,000 (5%) shares only in case of demand.
The government currently holds an 87.40 percent stake in IRCTC. As per SEBI’s guideline publicly listed companies can only hold up to 75% shares. So to meet Sebi’s public holding norm, the government has to lower its stake in IRCTC.
The floor price of the offer fixed at Rs 1,367 per equity share was 15% discounted to Wednesday’s (09 DEC 2020) closing price of Rs 1,618. In the next two days after the announcement of OFS, the share price fell more than 13%.
What is Offer For Sale?
An OFS (offer for sale) is a simple method for selling shares that are held by promoters of publically listed companies. The mechanism was first introduced by SEBI (Securities and Exchange Board of India), in 2012.
The OFS segment was earlier allowed only to sell stake held by Promoters of listed companies to achieve a minimum public shareholding of 25%. Now, however, the segment has been extended to non-promoters of eligible companies holding at least 10% of the share capital of the company.
IRCTC Offer For Sale Issue Details
| Type | OFS |
| Symbol | IRCTC |
| Date of Offer for Sale | For Retail investors: Friday, 11.12.2020 |
| ISIN No. | INE335Y01012 |
| No. of shares being offered for sale | Total Shares: 3,20,00,000 Base offer size: 2,40,00,000 with an additional option up to 80,00,000 shares |
| Face Value | Rs 10/- |
| Floor Price | Rs 1,367/- |
| Tick Price | Rs. 0.05/- |
| Lot Size | 1 equity share |
| Allocation methodology | Price Priority |
| Stock Exchanges | BSE & NSE |
| Exchange Bidding Time | 09:15 AM to 03:30 PM |
| Reservation Portion for Retail | 10% of Issue size reserved for Retail Investors |
2 comments
Unfortunately i purchasd these shares @1765. Is there any chance to touch that level in near future?
How to apply?