Govt's share sale in IRCTC over-subscribed on Day 1; bids worth Rs 3,800 cr received from institutional investors

Drawing an overwhemling response from institutional investors, the government's up to 5 percent stake sale in IRCTC got over-subscribed on the first day of the offer. Institutional investors put in bids worth Rs 3,800 crore.

In the two-day offer-for-sale (OFS) in Indian Railway Catering and Tourism Corporation (IRCTC), 4 crore shares or 5 percent stake of the Centre will be diluted at a floor price of Rs 680 a share.

The OFS consists of base issue size of 2 crore shares or 2.5 percent stake, with an option to retain over-subscription of similar amount.

As much as 10 percent of the issue is reserved for retail investors, for whom bidding would open on Friday.

On Thursday, bids for over 5.55 crore shares, representing 3.08 times the base issue size of 1.80 crore shares were put in by institutional investors. Calculated on the basis of the floor price, the bids would be valued at about Rs 3,800 crore.

Shares of IRCTC settled at Rs 689.20 apiece, down 6.19 per cent over the previous close on the BSE. During the day, the scrip touched a low of Rs 687, but held above the OFS floor price of Rs 680.

The floor price was at a discount of 7 per cent over Wednesday's closing price of Rs 734.70. The government holds 67.40 per cent stake in IRCTC.

Proceeds from IRCTC OFS will add to the disinvestment kitty of the government, which has already raised Rs 28,383 crore from CPSE stake sale so far this fiscal year against the full year budget target of Rs 65,000 crore.