IRCTC shares jump 132% after stellar stock market debut
Indian Railway Catering and Tourism Corporation (IRCTC) has made a strong stock market debut on Monday, listing at a 103 percent premium from its issue price. The IRCTC IPO, which was open for subscription between September 30 and October 4, was subscribed 112 times at a price band of Rs 315-320 per share. The IRCTC IPO was listed at Rs 651 per share on the BSE, a premium of 103.4 percent from its issue price of Rs 320 per share.
At 12:10 PM, IRCTC shares traded at Rs 723.55 per share, up 126.11 percent from its issue price. Intraday, the stock hit a high of Rs 743.80 per share, up 132.4 percent from its issue price.
The IRCTC IPO comprised an offer-for-sale of 2.01 crore shares of the face value of Rs 10 each. Out of the total issue size, 1,60,000 equity shares are reserved for eligible employees.
The category meant for qualified institutional buyers (QIBs) was subscribed 108.79 times, non-institutional investors (NIIs) category witnessed a subscription of 354.52 times, while the same for retail investors stood at 14.65 times.
Most brokerages had given the IPO a 'subscribe' recommendation on its reasonable valuation and monopoly in the railways. The analysts also note that the key risk and concerns for the company remain change in the policy of Ministry of Railways could impact financials, competition could pose a risk to its monopoly position, and stricter regulatory requirements for use of plastic.
"Increasing business volumes from catering and Packaged drinking water businesses, along with service charge for online ticket booking will drive earnings growth for the company between FY19-21. We would, therefore, recommend to Subscribe to the issue," Prabhudas Lilladher said in a report.
IRCTC is the only entity authorised by Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India.Also, track all live market action on CNBC-TV18 Market Blog Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions
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Shares of IRCTC more than doubled on their listing debut on BSE and NSE. They rose as much as 132% to 743, as compared to issue price of 320, before ending at ₹728, up 127%.
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