NEW DELHI: The two-day offer for sale (OFS) of the government’s up to 5% stake in IRCTC received a tremendous response as it got over-subscribed on the first day of the offer, with institutional investors putting in bids worth Rs 3,800 crore.
“Offer for Sale’ of Government equity in IRCTC received enthusiastic response from non-retail investors today. The issue was subscribed 3.08 times of the base size. Government has decided to exercise the green-shoe option,” said the Secretary of the Department of Investment and Public Asset Management (DIPAM) on Twitter.
The Government of India is selling 4 crore shares or 5% stake in Indian Railway Catering and Tourism Corporation (IRCTC) at a floor price of Rs 680 a share. The OFS consists of base issue size of 2 crore shares or 2.5% stake, with an option to retain over-subscription of similar amount.
As much as 10% 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% over the previous close on the BSE. During the day, IRCTC shares 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% over Wednesday’s closing price of Rs 734.70. The government holds 67.40% stake in IRCTC.