Government To Sell 15-20% Stake In IRCTC Via Offer For Sale

The government plans to sell 15-20% of its stake in IRCTC Ltd. via an offer for sale and in the least number of tranches possible.

Last month, the Department of Investment and Public Asset Management, or DIPAM, had invited bids from merchant bankers by Sept. 10 for managing the stake sale but didn’t disclose the quantum of stake on offer in the Request for Proposal. Following this, a pre-bid meeting was held on Sept. 4 with potential bidders. DIPAM has now posted on its website responses to queries raised by potential bidders.

"The indicative percentage is 15% to 20%. The exact details will be shared with the selected merchant bankers,” DIPAM told Press Trust of India on Tuesday. “GOI would not like to have an OFS overhang and hence would like to complete the transaction in minimum number of tranches... In case more than one tranche is used, pro-rata payment would be made to the merchant bankers.”

The government currently holds 87.40% stake in IRCTC. To meet the Securities and Exhcange Board of India’s public shareholding norms, it has to lower its stake to 75%.

The IRCTC OFS will help the government towards its divestment target of Rs 2.1 lakh crore for 2020-21. Of this, Rs 1.20 lakh crore is to come from disinvestment of public sector undertakings and Rs 90,000 crore from stake sale in financial institutions.