IRCTC IPO set for bumper debut at Dalal Street, subscribed 112 times, most successful in 20 months

The Initial Public Offering (IPO) of the government-owned Indian Railway Catering and Tourism Corporation (IRCTC) is set to make a bumper opening at the Dalal street after being subscribed by almost 112 times. The over-subscription has made IRCTC IPO becoming the most successful share sale in the last 20 months. Leading financial daily, the Economic Times reported that, major institutions along with rich investors led the subscription making it one of the most subscribed IPOs in over 20 months.

Notably, Apollo Micro Systems, which was subscribed 250.7 times and Amber Enterprises India, which was subscribed 115.3 times were one of the best subscribed IPOs in recent history which were launched in January 2018. Out of overall quota, the QIBs portion got subscribed 108.8 times while HNI portion got subscribed 354.5 times.

Moreover, retail and employees portion got subscribed 14.6 times and 5.8 times, respectively. In order to encourage more subscription from retail investors, the final offer price was discounted by Rs 10 for retail investors and employees of IRCTC. The price band set for IRCTC was Rs 315-Rs 320 for the IPO.

The book running lead managers for the IPO were IDBI Capital Markets & Securities, SBI Capital Markets and YES Securities (India). Department of Investment and Public Asset Management (Dipam) tweeted, "IRCTC IPO has evoked a tremendous response from all the categories of investors, with the issue being subscribed more than 111 times. The issue, which divested 12.6% of GoI's stake in the CPSE is expected to generate revenue of Rs 645 crore. It is the 2nd CPSE to be listed this fisc."

"The grey market premium of around Rs 200 captures the value of the business. Further gains will depend on how the company ramps up its e-ticket business, how its private train project ramps up and when the new water bottling plants come up," argued Geetanjali Kedia, senior research analyst at SPTulsian.com. "The listing should be around Rs 520- Rs 525," he further added.

The IRCTC IPO has been attracting investors across the market due to attractive pricing and monopolistic nature of the company's business. Major brokerages including IndiaNivesh Securities, ICICIdirect, BP Equities, Angel Broking, Phillip Capital and Anand Rathi had given subscribe rating to the issue.