With an oversubscription of 112 times, IRCTC’s stock offer is a showstopper

K. S. Badri Narayanan Updated - October 04, 2019 at 09:17 AM.

The retail portion was subscribed by 14.4 times, QIBs 108.79 times, HNIs 354.5 times and employees 5.75 times

Everyone seems keen on hitching a ride with the Indian Railway Catering and Tourism Corporation (IRCTC), the response to its IPO shows. On Thursday, the final day of bidding, the issue was subscribed over 111.93 times, the biggest response that a PSU has ever received for its public float. The IPO is priced in the range of ₹315-320 a share.

With all categories of investors — FPIs, HNIs, institutions and retail — pouring in money, the issue received bids for ₹72,000 crore against the target of ₹645 crore.

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This is much higher than the response received by HUDCO (79.47 times) and Cochin Shipyard (76.19 times) in 2017.

The retail portion was subscribed 14.4 times, Qualified Institutional Buyers’ (QIBs) portion 108.79 times, HNIs’ 354.5 times and employees’ 5.75 times.

In almost two years, this is the second company after Amber Enterprises to cross 100 times oversubscription. The IPO of Amber was subscribed 165.38 times in January 2018.

IRCTC’s IPO received bids for 225.67 crore shares against the total issue size of two crore shares, according to data available with the NSE. Of the total issue size, 1.6 lakh equity shares are reserved for employees.

Sign of market revival?

But does IRCTC’s good run signify a market revival? Says Arun Kejriwal of KRIS Securities: “IRCTC received a huge response due to its strong fundamentals. However, this does not point to the revival of the IPO market as yet.”

“Investors should weigh in the merits of each and every company before putting their hard-earned money,” he added.

 

Published on October 3, 2019 13:02