IRCTC All Set For Its Stock Market Debut: All You Need To Know About The E-Ticketing Giant’s IPO

State-owned Indian Railway Catering and Tourism Corporation (IRCTC) will launch its initial public offering (IPO) on 30 September. The government as a result is set to dilute its shares in the Indian Railways subsidiary by 12.5 per cent.

IRCTC, which sells tickets for Indian Railways and manages its catering service, has set the IPO price band at Rs 315-320 per share. The company will offer 2.16 crore equity shares of face value Rs 10, representing 12.5 per cent of total paid-up equity.

Of the total shares on offer, 50 per cent will be available for allocation to qualified institutional buyers (QIBs), including 2 lakh equity shares for the mutual fund portion on a proportionate basis.

In addition, not less than 15 per cent of the offer will be available to non-institutional investor category and at least 35 per cent will be made available to the retail category.

Based on the company's earnings-per-share of Rs 17.04 for 2018-19 (Apr-Mar), the shares are valued at 18.5-18.8 times their one-year trailing price-to-earnings multiples.

Bids can be made for a minimum of 40 shares, and in multiples of 40 thereafter.

The timing of the IPO comes days after the Union government's decision to cut corporate taxes which send the stock markets soaring. The proposed IPO is expected to see the government sell stake worth Rs 480 crore through an offer for sale.

Incorporated on 27 September 1999 as a public limited company, IRCTC has four business verticals - internet ticketing, catering, packaged drinking water under the ‘Rail Neer’ brand, and travel and tourism.

IRCTC's vision is to establish itself as a leader in the area(s) of hospitality services, travel and tourism, packaged drinking water, and internet ticketing.

It seeks to achieve this by providing value-added products and services for passengers, tourists and other customers, targeting IR (Indian Railways) and non-IR-related services alike, building a resilient business portfolio that is scalable and based on core competence.

The company's sales in the financial year 2018-19 stood at Rs 1,899 crore and it recorded a profit of Rs 272.5 crore. IRCTC makes its money from its e-ticketing monopoly, wherein it earns Rs 10-20 per e-ticket sold, apart from franchise revenues in catering.

The company's website is one of the most transacted in the Asia-Pacific region, with a transaction volume of over 25 million a month.

Also read - Online FDI: Will Suresh Prabhu’s IRCTC Become India’s Alibaba Or Air India?