IRCTC May Hit the Market with IPO on 30th September

The state-owned Indian Railway Catering and Tourism Corp. Ltd (IRCTC) plans to launch its Initial Public Offering (IPO) immediately after the sharp turnaround in the market with benchmark Sensex, which gained 8% or 2899 points after the government cut corporate tax on Friday.

The Indian Railway and Tourism Corporation (IRCTC) is the subsidiary of Indian railway that handles ticketing and catering operations. The stake sale will be bringing down the government share in the Public Sector Undertaking (PSU) by 12.5 percent from almost 100 percent at present.

The IPO is expected to raise government around Rs. 500 crores to Rs. 600 crore according to recent PTI report which will be launched around the Hindu festival of Navratri which initiates September 29.

The PSU has already filled the draft red herring prospectus (DRHP) with SEBI in August. IRCTC generated revenue of Rd. 1899 crore in FY19, up 25% from the previous fiscal, as the firm's DRHP, revealed.

Incorporated by the government in 1999, IRCTC's businesses are divided into four segments- internet ticketing, catering, packaged drinking water under "Rail Neer" brad and travel and tourism. The IRCTC website is one of the most transacted in the Asia-Pacific region with the transaction volume of more than 25 million a month and around 800,000 tickets per day. IRCTC conferred the status of Minitatna (Category-I Public Sector Enterprise) status in 2008

Indian Railway Catering and Tourism Corporation (IRCTC)'s online ticketing is known for changing the face of the railway ticketing in India as it provided hygienic and quality food to the passengers while traveling. The PSU pioneered its internal based Rail booking through its website, as well as mobile phones via Wi-fi, GPRS and SMS. Beside e-tickets, I-tickets and RDS (Rolling Deposit Scheme) are also launched by IRCTC that contributes to its profits.

With budget-friendly tourism packages offered by IRCTC covering various tourist destinations across the country called "Bharat Darshan", new luxury trains of Indian Railways targeting luxury railway experience have also been launched called Buddhist Circuit Train and Maharajas' Express.

The IRCTC IPO is a part of the government's disinvestment program to raise a record amount of Rs. 1.05 Lakh crore in 2019-20 that is collected in the previous fiscal. Finance minister Nirmala Sitaraman has set the target to 1.05 crore for FY20, up from Piyush Goyal's interim Budget target of Rs. 90,000 crore.

The initial public offering of IRCTC comes after the central government approved lists of five government entities- ICON international, RITES, Rail Vikas Nigam Ltd. IRCTC. While RITES and IRCON International made their market debut in fiscal 2018-19, the government raised about Rs. 480 crore through Rail Vikas Nigam Ltd initial public offer by 12.2% state in April this year.