Indian Railways’ online unit IRCTC plans Rs 500-600 cr IPO

Indian Railway Catering and Tourism Corporation (IRCTC), the tourism and catering arm of the Indian Railways, has filed the draft red herring prospectus (DRHP) in the run-up to its initial public offering (IPO).

The issue will offer two crore equity shares of Rs 10 each, an official statement said. 

The total size of the offer could be anywhere around Rs 500-600 crore, IRCTC said, citing market sources.

While a DRHP does not reveal any information about the price band of the shares or size of the offering, it provides details of the company’s business operations and financials. Some of the information that a DRHP contains includes details about promoters, the intent behind raising the money, utilisation of the sale proceeds and the potential risks that could come with investing in the company. 

Around 50% of the issue will be reserved for qualified institutional buyers (QIBs) while 15% will be reserved on a proportionate basis for non-institutional bidders. 

While 35% of the total issue will be for retail individual investors,  eligible IRCTC employees will get an allocation that does not exceed 5% of the paid up equity share capital of the company.

IDBI Capital Markets & Securities, SBI Capital Market and YES Securities (India) are the book running lead managers for the offer.

IRCTC is a mini-Ratna Category-I company, which means it generated profits continuously over the last three financial years or earned a net profit of Rs 30 crore or more in one of the three years. The status was conferred to the public sector enterprise in 2008.

IRCTC also claims that it is one of the most transacted e-commerce sites. Its website,irctc.co.in, handles transaction volume that averages 25 million per month and 7.2 million logins a day. 

“Over 1.4 million passengers travel on a daily basis of which 71.42% book their tickets online. Between FY14-19, online bookings have grown at a CAGR of 12.5 per cent,” IRCTC said.