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IRCTC IPO subscribed 112 times: 10 points

IRCTC IPO was subscribed nearly 112 times by the end of the final day of its bidding.

Oct 4, 2019 11:18 IST
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IRCTC IPO: The Indian Railway Catering and Tourism Corporation (IRCTC) IPO created a record on the last day of its subscription. It got subscribed more than 112 times than its actual decided numbers. A big hit among investors on the final day of its bidding has brought some positive sentiments in the economy. 

The IRCTC has now become the highest-ever subscribed government-owned company for a public issue. It is also a first PSU (Public Sector Undertaking) which has been subscribed for more than 100 times. 

The IPO opened on September 30 and closed on October 03. The IRCTC had put 2 crore shares for sale but it received bids for more than 225 crore shares.

The IPO has a price range of Rs 315–320 per share. In this IPO, 1.60 lakh shares have been reserved for qualified employees. About 2.01 crore shares with the IPO were given under the launch offer sale.

10 Points

• Bidding for Qualified Institutional Buyers (QIBs) was 108.79 times in the reserved stocks category, it was 354.52 times in the non-institutional investors (NII) category and 14.65 times in the retail investors’ category.
• IRCTC IPO has received tremendous response from all categories of investors. The public issue was subscribed 111 times.
• The government has sold its 12.6 percent stake in the company through an IPO, which is expected to raise Rs 645 crore.
• The offer was being managed by Yes Securities (India), SBI Capital Markets and IDBI Capital Markets and Securities.
• The Department of Investment and Public Asset Management (Deepam) has written on Twitter that IRCTC's IPO has received an excellent response from all categories of investors.
• Government of India is disinvesting 12.6 per cent stake under this IPO.
• Now, the Government will hold a 87.4% stake in IRCTC after the IPO.
• IRCTC have not received any proceeds from the offer and all proceeds have gone to the government.
• IRCTC offers nationwide e-catering service to the passengers through a mobile app.
• The government of India has a target of raising Rs 1.05 lakh crore via sale of stakes in various PSUs and IRCTC divestment is part of the government’s plan.

What is IPO?

IPO stands for Initial Public Offering. First of all, companies get listed on the stock market and offer to sell their shares to the investors. The process of offloading shares among the common people for the first time is called Initial Public Offer (IPO) Offer. An IPO can be offered by fixed price or book building or both ways.

What is IPO Price Band?

Most companies that are allowed to launch IPOs can decide the price of their shares. However, companies in the field of infrastructure and some other sectors have to get permission from SEBI and the Reserve Bank. The company's board of directors, along with Bookrunner, decides the price band. In India, the maximum 20 per cent price band is allowed. It means that the price band cannot be more than 20 per cent above the floor price of the share.

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