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IRCTC ends first day up 128% over issue price

At the issue price, the stock quoted at 19 times FY19 EPS of Rs 17.

ETMarkets.com|
Updated: Oct 14, 2019, 07.11 PM IST
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IRCTC listing: Blockbuster debut for the subsidiary of Railways; shares zoom 127%
IRCTC listing: Blockbuster debut for the subsidiary of Railways; shares zoom 127%
NEW DELHI: Shares of IRCTC made a strong debut on Monday, as they got listed at Rs 644 on BSE, a 101.25 premium over issue price of Rs 320.

At the close of the session, the scrip ended at 127.69 per cent higher at Rs 728.60 on the exchange.

A strong listing was a given as the stock was quoting at a premium of Rs 220-227 per share in the grey market last week, thanks to 112 times subscription the IPO received during the offer period September 30-October 4.

The category meant for qualified institutional buyers (QIBs) was subscribed 108.79 times, non-institutional investors (NIIs) quota 354.52 times and retail investors 14.65 times.

At the issue price, the stock quoted at 19 times FY19 EPS of Rs 17.

IRCTC is the only entity authorised by Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India.

IRCTC was conferred the Mini–Ratna staus in May 2008.

Anand Rathi Financial Services said that the company revenues 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 company is also diversified into other businesses, including non-railway catering and services such as e-catering, executive lounges and budget hotel. Its sales rose 25 per cent year-on-year to Rs 1,899 crore, and its profit grew 23.5 per cent to Rs 272.5 crore in financial year 2019, according to its draft red herring prospectus filed with the regulators in August.

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