Govt plans further stake sale in IRCTC, invites bids from merchant bankers by Sep 10

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The federal government is planning to promote a part of its stake in Indian Railway Catering and Tourism Corp (IRCTC) within the present fiscal, and has invited bids from service provider bankers for managing the sale course of.

“The GoI intends to disinvest part of the paid up fairness capital of IRCTC out of its shareholding by way of ‘Provide for Sale (OFS) methodology of shares by promoters by way of the inventory exchanges’ as per Securities and Change Board of India (Sebi) Guidelines and Rules,” DIPAM stated whereas inviting Request for Proposal (RFP).

The service provider bankers should submit their bids by September 10.

The federal government at the moment holds 87.40 per cent stake in IRCTC. To satisfy Sebi’s public holding norm, the federal government has to decrease its stake within the firm to 75 per cent.

Shares of IRCTC closed at Rs 1,346.65 apiece on the BSE, down 1.20 per cent over its earlier shut.

IRCTC, the one entity authorised by Indian Railways to supply catering companies to railways, on-line railway tickets and packaged ingesting water at railway stations and trains in India, was on the inventory exchanges in October 2019. The corporate had raised Rs 645 crore by way of the IPO.

IRCTC OFS will assist the federal government inch ahead in assembly the Rs 2.10 lakh crore disinvestment goal. Of this, Rs 1.20 lakh crore will come from disinvestment of public sector undertakings and one other Rs 90,000 crore from stake sale in monetary establishments.

Up to now within the present fiscal, the Division of Funding and Public Asset Administration (DIPAM) has not been capable of promote stake in any CPSE because the coronavirus outbreak has impacted fairness markets. Nonetheless, by way of Bharat Bond ETF-II, the federal government has garnered subscription value Rs 11,000 crore for ‘AAA’ rated bonds of CPSEs.

DIPAM Secretary Tuhin Kanta Pandey had final month stated restrictions on worldwide journey as a consequence of COVID-19 pandemic have put brakes on strategic disinvestment of CPSEs, like Air India and BPCL, however finishing the transactions stays a precedence of the federal government.

DIPAM, which manages the CPSE stake sale course of, has additionally set into movement the method of itemizing of the nation’s largest insurer Life Insurance coverage Company (LIC) and appointed pre-IPO transaction advisor. The federal government is taking a look at itemizing the insurer on home bourses within the January-March quarter of the present fiscal.

The federal government can be taking a look at launching preliminary public providing (IPO) of Indian Railway Finance Corp Ltd (IRFC) and had in January filed draft crimson herring prospectus (DRHP) with the Securities and Change Board of India for IPO of over 140 crore fairness shares.

The Union Cupboard had in April 2017 authorised itemizing of 5 railway firms. Whereas 4 of them — IRCON Worldwide Ltd, RITES Ltd, Rail Vikas Nigam Ltd and IRTC — have already been listed, IRFC is more likely to be placed on the block this fiscal.

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