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IRCTC IPO overall subscribed 112 times, NII quota 354 times

The qualified institutional buyers (QIB) quota was subscribed 108.8 times, NII 354 times.

ETMarkets.com|
Updated: Oct 03, 2019, 08.08 PM IST
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The issue is an offer for sale and is a part of the government's divestment process.
NEW DELHI: The Rs 645-crore initial public offer (IPO) by state-run IRCTC was overall subscribed 111.92 times on the last day of the issue on Thursday.

The issue of 2,01,60,000 shares received bids for 2,25,63,63,400 shares.

The qualified institutional buyers (QIB) quota was subscribed 108.8 times, non-institutional investors (NII) 354 times and retail investors 14 times.

IRCTC has been the best PSU as well as the most successful IPO in the last two fiscal years in terms of overall subscription where it leads in QIB, NII and employee segments.

IRCTC had set the IPO price band at Rs 315-320 per share. At the upper price band, the stock was priced at P/E multiple of 18.8 times to its FY19 EPS of Rs 17.

Anand Rathi Financial Services said that the company revenue should shoot up in the next 1-2 years due to the convenience fee and privatisation of two routes. Also, the company would get additional benefit from the recent effective tax-regime change to 25 per cent, it said.

"Undoubtedly, the debt free, IRCTC has a strong moat in a monopolistic business. However, the government’s interest would not always align with the 12.6 per cent minority shareholders interest," it said.

The IPO looks attractive due to limited competitive risks, and expected margin swing from revenue windfall with reintroduction of service charge, said Prabhudas Lilladher.

The issue is an offer for sale and is a part of the government's divestment process.

IRCTC operates a website, www.irctc.co.in, with transaction volume averaging 15 to 18 million transactions per month in the three months ended June 30. At present, it operates in four business segments, namely, internet ticketing, catering, packaged drinking water under the “Rail Neer” brand, and travel and tourism.

The inclusion of a convenience fee on railway tickets, setting up 10 water plants in the next two years and the recent tax reduction of corporate tax bodes well for EPS growth, said ICICIdirect in a note.

Also Read

Railways protest over under-pricing of IRCTC IPO

IRCTC IPO subscribed 81% on Day 1

IRCTC IPO commands strong premium in grey market

IRCTC IPO, subscribed 112 times, is the most successful in 20 months

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