Government has decided to offload 5 per cent of its equity in Indian Railway Catering and Tourism Corporation (IRCTC). Shares will be sold with the help of Offer for Sale through Stock Exchanges (OFS).

According to notice given to stock exchanges, 2 crore shares have been offered under OFS. Also, there will be green shoe option of another 2 crore, which means a total of 4 crore shares can be sold. 10 per cent of issues size, which means 20 lakh, will be reserved for retail investors. OFS will open on December 15, but retail investors can bid on December 16.

Floor price

Floor price has been kept at ₹680, which means one can start bidding at this price. Lot size is 1 share.  Floor price is 7 per cent discount at closing price of ₹734.70 on Wednesday. At the floor price, government can get minimum of ₹2,720 crore, if green shoe option is also exercised.  

A senior government official confirmed that the decision on disinvestment has been taken, and soon all details will be out on stock exchanges. At present, the government holds 67.4 per cent shares in the company, which is known mainly as a platform for online railway ticket booking.

Decline in revenue

Meanwhile, Railway Minister Ashwini Vaishnaw told Lok Sabha, that IRCTC’s revenue “reduced drastically” by almost 64 per cent during 2020-21 as compared with in 2019-20 due to Covid-related travel restrictions. Replying to a query in Lok Sabha, he said in 2019-2020, IRCTC earned ₹2,342.41 crore, which went down to ₹861.64 crore during the Covid-affected 2020-21. In 2021-22, the IRCTC earned ₹1,952.30 crore.

“Revenue during FY20–FY21 has reduced drastically as compared with FY19–FY20 due to travel restrictions imposed during Covid-19 . However, after lifting of restrictions, and the starting of cooked food in trains during FY2021-22, revenue again gradually increased,” he said.

Number of passengers

He also said the estimated number of rail passengers who used IRCTC to book train tickets during 2019-2020 was 5,229 lakh, followed by 3,052 lakh in 2020-21, and 7,343 lakh in 2021-22.

In the current fiscal, till October 31, as many as 4,607 lakh passengers have booked tickets through IRCTC, he said. The minister said that apart from IRCTC, there are several key players in the online ticketing sector such as Makemytrip and Easemytrip. “However, the business of these companies cannot be compared with IRCTC, due to the presence of IRCTC in other segments such as catering, travel and tourism as well as Railneer, in addition to internet ticketing.

The company’s market capitalisation has, however, increased to ₹61,976 crore as on March 31, 2022, from ₹11,644 crore since its listing (14th October, 2019),” he said

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