Post-listing, who are the public shareholders of IRCTC?

KS Badri Narayanan | Updated on November 08, 2019

A view inside a coach of the newly launched Lucknow-Delhi Tejas Express, India's first ‘private’ train by IRCTC at the Charbagh Railway station in Lucknow on Friday

Shareholding patterns are crucial when making investment decisions

The Indian Railway Catering and Tourism Corporation (IRCTC), the online ticketing, tourism and catering arm of Indian Railways, has made waves, both at pre-listing and post-listing trading sessions in the market.

The public issue from the PSU major had received overwhelming response from all categories of investors. The IPO saw applications for a massive 112 times, which none of the previous public issues from the public sector stable ever achieved. The retail category was subscribed nearly 15 times while the qualified institutional buyers (QIBs) segment was subscribed 109 times, and non-institutional investors (NIIs) category 355 times.

While the IPO created history, post listing, the stock continues to put up a high-voltage performance. Against the issue price of Rs 320, IRCTC shares ended 127.4 per cent higher at Rs 727.75 after listing at Rs 626 on the NSE on October 14. Since then, it made rapid strides to touch a high of Rs 953.50 within the first 10 days of listing, and is currently hovering at Rs 884, almost three times up from the issue price.

So, one is curious to know who benefited or is benefiting from the blockbuster listing? Unfortunately, data related to this aspect is not available on the web sites of the stock exchanges.

According to the disclosure made on October 23 by the company, almost 10 days after the listing, the promoter (the President of India) holds 87.40 per cent stake and the public 12.60 per cent (in the IRCTC public issue escrow demat account) at the end of September 30, 2019.

But there is no detailed break-up of the public portion into retail, FPIs, DIIs.

Companies have to file an elaborate shareholding pattern to the exchanges one day ahead of listing.

The SEBI rule states that the listed entity should submit to the stock exchange(s) a statement showing holding of securities and shareholding pattern separately for each class of securities, in the format specified by the Board from time to time within the following timelines: one day prior to listing of its securities on the stock exchange(s); on quarterly basis, within 21 days from the end of each quarter; and within 10 days of any capital restructuring of the listed entity resulting in a change exceeding 2 per cent of the total paid-up share capital.

The company came out with the IPO between September 30 and October 3. The IRCTC corporate web site has the shareholding data only till September 2019.

Shareholding patterns offer crucial information for prospective investors to take an informed investment decision. Most investors consider holdings by foreign portfolio investors, domestic institutional investors and mutual funds as among crucial factors for investment in a company. Since IRCTC did not come out with an anchor issue, the data on institutional participation is also not known.

The only information available with the exchanges on the IRCTC shareholding is that Reliance Mutual Fund bought 15 lakh shares on October 14 (listing day) at an average price of Rs 626, NSE bulk deal data revealed.

However, many of the IPO investors seem to have exited on Day 1 itself. Against IRCTC’s IPO size of 2.01 crore shares, the listing day saw deliverable quantity of 1.54 crore shares on the NSE and the BSE, which is more than 75 per cent of the issued shares.

With the company not announcing the post-IPO ownership pattern, one may have to wait till the end of the December quarter to get further details of its ownership.

Some other companies such as Spandana Sphoorty Financial and Affle (India), which came out with their IPOs in July and August, had disclosed elaborate shareholding pattern data pertaining to one day ahead of the listing. But those were disclosed only a few days post listing to the stock exchanges. Vishwaraj Sugar Industries, which came out with its IPO during the same time as IRCTC, too disclosed the shareholding pattern pertaining to September 30.

Maybe it is time for the stock exchanges to turn more vigilant on this very important disclosure.

Published on November 08, 2019

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