Government To Sell A 15 to 20 Percent Stake In IRCTC

Government to sell a 15 to 20 percent stake in IRCTC, invites bids from bankers to manage sales. The government is planning to sell about 15 to 20 percent stake in the Indian Railway Catering and Tourism Corporation (IRCTC). The government is planning to sell this stake in IRCTC through Offer for Sale (OFS). Also, the government would like to complete this transaction in minimum installments.

Last month, the Department of Investment and Public Asset Management (DIPAM) invited bids from merchant bankers by 10 September to manage sales at IRCTC. However, it did not disclose the amount of stake on the proposal in Request for Proposal (RFP).

Subsequently, a pre-bid meeting with potential bidders was held on 4 September. DIPAM has now posted its response to queries raised by potential bidders on its website.

In response to a question regarding stake percentage, DIPAM said, “The indicative percentage is 15 percent to 20 percent. The exact information 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 standard, the government will have to bring its stake in the company to 75 per cent. IRCTC shares fell 2.57 per cent to close at 1,378.05 on the Bombay Stock Exchange on Tuesday.

Meanwhile

Global rating agency Fitch has projected a massive contraction of 10.5 per cent in the Indian economy during the current financial year. There was a record decline in the pace of India’s economic growth during the April to June quarter. The country’s GDP (-) stood at 23.9 per cent in the first quarter of the current fiscal year due to the nationwide lockdown implemented to prevent the spread of coronavirus.

Fitch has stated, “With the reopening of the economy, a strong rebound in GDP is expected during the third quarter (October-December) of FY 2020-21. However, there are signs of sluggish and uneven recovery. ”