Indian Railway Catering and Tourism Corporation (IRCTC) shares tumbled more than 5% in late morning trade on Thursday after the government announced a stake sale of up to 5% through an offer-for-sale (OFS) at a minimum price of Rs 680 per share.
A brief about IRCTC shares drops down more than 5% after the government announces a stake sale through the OFS
During late morning trades, the scrip plummeted as much as 5.56 percent to a low of Rs 694.05 a share on the National Stock Exchange (NSE), while it fell as much as 5.49 percent to Rs 694.40 on the BSE.
On Wednesday evening, the Indian Railways’ train ticketing and catering arm announced that the government will sell up to 5% of its ownership in the company. The stake sale is part of the government’s fiscal year-end divestiture plan. So far this fiscal year, the government has generated Rs 28,383 crore via the sale of stakes in central public sector businesses, compared to the full-year budget objective of Rs 65,000 crore.
The government intends to sell a 2.5 percent interest in the state-owned corporation at Rs 680 per share, with an option to sell an additional 2.5 percent, according to an exchange filing by IRCTC.
At the floor price of Rs 680 per share, the sale of 4 crores IRCTC shares would bring in approximately Rs 2,700 crore for the government. The floor price is 7.47 percent lower than Wednesday’s NSE closing price of Rs 734.90 IRCTC.
On Thursday, institutional investors and ordinary investors will be able to subscribe to the OFS.