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IRCTC Stake Sale: Government Invites Bids From Merchant Bankers by Sept 10

Indian railway stake sale

IRCTC stake sale is planned by the government of India in the current financial year. The government is selling part of its stake in IRCTC (Indian Railway Catering and Tourism Corp). It has invited merchant bankers’ bid to manage the sale process.

The Government of India intends to disinvest a part of its paid-up IRCTC equity capital from its shareholding via the OFS method. The government plans Offer for sale via promoters and stock exchanges according to the rules and regulations of Sebi. The statement was made by DIPAM while summoning Request for Proposal.

The merchant bankers can submit their bids before 10 September. The government holds an 87.40% stake in IRCTC at present. However, the government has to low its stakes in IRCTC by 75% to meet the public holding norm of Sebi.

COVID-19 Impacting on Strategic Disinvestment

IRCTC (1) is the only authorized entity to provide catering services to and other services ar railways stations and trains in India. The company’s OFS will help the government of India to rich the 2.1 trillion INR disinvestment target. The 1.20 trillion INR will come via disinvestment of public sector undertakings and 90,000 crore INR from stake sale in financial institutes.

There has been a significant impact on coronavirus outbreak on the equity markets; hence the Department of Investment and Public Asset Management could not sell any CPSE sale. However, India’s government has gathered a subscription of 11,000 crore INR for AAA-rated COSEs bonds via Bharat Bond ETF-II.

DIPAM manages the stake sale process of CPSE and also initiated the process of listing LIC country’s largest insurer and has also appointed an advisor for pre-IPO transactions. The government is also looking forward to launching the IPO of IRFC and have submitted the draft red herring prospectus to the Securities and Exchange Board of India in January for IPO over 140 crore equity share.