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IRCTC to launch IPO on September 30, expects to raise Rs 500-600 crore

The decision to list IRCTC in the stock market comes after the benchmark Sensex gained 8% or 2,899 points since Finance Minister Nirmala Sitharaman made an announcement to cut the corporate tax rate.

With Sensex on a rebound, the Indian Railway Catering and Tourism Corporation (IRCTC) is planning to launch its initial public offering (IPO) on September 30. The decision to list IRCTC in the stock market comes after the benchmark Sensex gained 8% or 2,899 points since Finance Minister Nirmala Sitharaman made an announcement to cut the corporate tax rate.

According to the reports, state-owned IRCTC, which sells tickets for Indian Railways and manages its catering services, is expected to raise Rs 500-600 crore through its IPO. The government is looking to offload up to 20 million shares in IRCTC, following that the government’s stake in IRCTC will come down by 12.5 per cent.

Reportedly, the company’s shares are proposed to be listed on BSE and NSE. The government has already filed IRCTC’s draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI) in August this year. The price band will be announced on Wednesday, September 25.

Reportedly, IRCTC’s business is divided into four segments — internet ticketing, catering, packaged drinking water under the ‘Rail Neer’ brand, and travel and tourism. While its sales rose 25% to Rs 1,899 crore, its profit grew 23.5% to Rs 272.5 crore in the fiscal year 2019, compared to last fiscal.

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IRCTC is the subsidiary of Indian Railways and handles online ticketing, catering and tourism operations. The IRCTC is one of the most visited websites in the Asia-Pacific region, with a transaction volume of more than 25 million per month, and 7.2 million logins per day. About 800,000 tickets are booked every day through the IRCTC website and Rail Connect.

However, catering has been the company’s biggest contributor to sales over the years. While more than half of its revenues at Rs 1,044 crore came from its catering business in 2019, internet ticketing business contributed about 12% of its revenue. The remaining Rs 444 crore came from its tourism and travel-related services and Rs 176 crore from its Rail Neer packaged drinking water business.

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OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

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