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 SE.
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.