Modi government to sell its stake in IRCTC, appoint merchant bankers

New Delhi, Thursday 20 August 2020

The Modi government is now preparing to sell more stake in the Indian Railway Catering and Tourism Corporation (IRCTC). The sale will be part of the Narendra Modi government's ambitious plan to raise Rs 2.1 lakh crore from disinvestment this financial year, 2020-21.

It may be mentioned that after the IPO of IRCTC came out last year, the government's participation in it had come down to 87.40 per cent. According to a report by a business TV channel, the disinvestment department has started hiring merchant bankers and selling brokers to sell its stake in IRCTC. The sale will be made by OFS. The pre-bid meeting for OFS has taken place and now the bidding process can start from September 11.

Offer or Sale means that a listed company sells its shares on an exchange platform through OFS route. This is a special window that only the top 200 companies get. At least 25 per cent of the shares are to be reserved for institutional investors such as mutual funds or insurance companies.

Through the IRCT's OFS, the government will be able to move towards achieving its disinvestment target. In the current financial year, the government has disinvested Rs. It aims to collect Rs 2.10 lakh crore. Out of this, Rs. 1.20 lakh crore and Rs. 90,000 crore by selling stakes in financial institutions.

Promoters of listed companies use it to reduce their participation. With the IPO in September 2019, the government reduced its stake in IRCTC by 12.6 per cent. Earlier, the government had 100 per cent stake in it through railways.

IRCTT arranges meals etc. during the journey along with online booking of tickets for the passengers traveling in the trains. Apart from this, the company operates private trains in the country.