The government currently holds 87.40 per cent
stake in IRCTC. To meet Sebi's public holding norm, it has to lower its stake
in the company to 75 per cent.
The government plans to
sell about 15-20 per cent stake in IRCTC via offer for sale (OFS) and would
like to complete the transaction in minimum number of tranches.
Last month, the
Department of Investment and Public Asset Management (DIPAM) had invited bids
from merchant bankers by September 10 for managing the sale in Indian Railway
Catering and Tourism Corp (IRCTC).
However, it did not disclose the quantum of stake on
offer in the Request for Proposal (RFP).
Following this, a pre-bid
meeting was held on September 4 with potential bidders.
DIPAM has now posted its
response to the queries raised by potential bidders on its website.
To a query on intended
stake dilution percentage, DIPAM said, "The indicative percentage is 15
per cent to 20 per cent. The exact details will be shared with the selected
merchant bankers."
The government currently
holds 87.40 per cent stake in IRCTC.
To meet Sebi's public
holding norm, it has to lower its stake in the company to 75 per cent.
Shares of IRCTC on Tuesday
closed 2.57 per cent lower at Rs 1,378.05 on the BSE.
Asked if payment would be
made by the government to merchant banker after completion of every single
tranche or cumulatively after the completion of entire transaction, DIPAM said,
"GOI would not like to have an OFS overhang and hence would like to complete
the transaction in minimum number of tranches as advised by merchant bankers
based on market conditions.
"In case more than one
tranche is used, pro-rata payment would be made to the merchant bankers."
IRCTC, the only entity
authorised by Indian Railways to provide catering services to railways, online
railway tickets and packaged drinking water at railway stations and trains in
India, was listed on stock exchanges in October 2019.
The company had raised Rs
645 crore through the IPO.
IRCTC OFS would help the
government inch forward towards meeting the Rs 2.10 lakh crore divestment
target for ongoing fiscal.
Of this, Rs 1.20 lakh crore
is to come from disinvestment of public sector undertakings and Rs 90,000 crore
from stake sale in financial institutions.
The government sold about
15 per cent stake in defence manufacturer Hindustan Aeronautics (HAL) via OFS
to raise around Rs 5,000 crore last month.
The Rs 900-crore OFS of
Bharat Dynamics is underway, with institutional investor portion over-subscribed
on Tuesday.
However, DIPAM has not been
able to sell strategic stake in any CPSE so far in the current fiscal as the
coronavirus outbreak has impacted equity markets.
The government, however,
has garnered subscription worth Rs 11,000 crore for 'AAA' rated bonds of CPSEs
through Bharat Bond ETF-II.
The government is also looking at launching initial public offering (IPO) of Indian Railway Finance Corp Ltd (IRFC), and had filed draft red herring prospectus (DRHP) with the Securities and Exchange Board of India in January for IPO of over 140 crore equity shares.
The Union Cabinet had in
April 2017 approved listing of five railway companies.
While four of them -- IRCON
International Ltd, RITES Ltd, Rail Vikas Nigam Ltd and IRCTC -- have already
been listed, IRFC is likely to be put on block this fiscal.
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