Government appoints merchant bankers for divestment of paid-up equity capital of IRCTC via OFS

The government has appointed merchant bankers for divestment of stakes in Indian Railway Catering and Tourism Corporation (IRCTC) through an offer for sale (OFS). The merchant bankers IIFL Securities Ltd, HSBC Securities and Capital Markets (India) Pvt. Ltd., ICICI Securities Ltd. and Axis Capital Ltd. have been appointed for a period of three years.

In a regulatory filing IRCTC said, "Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, Government of India vide its letter no. 3/8/2017-DIPAM-II-B dated October 23, 2020, (received on October 26, 2020), has appointed the following as Merchant Banker for a period of 3 (Three) years from the date of issuance of this letter for disinvestment of paid-up equity capital of IRCTC through Offer For Sale (OFS)"

Earlier, DIPAM had initiated the process to sell 15-20 per cent stake in IRCTC through OFS in September 2020. The government had 87.40 per cent stake in IRCTC as of June 30, 2020. To meet SEBI'S public holding norms, the government has to lower its stake in the company to 75 per cent.

IRCTC is the only entity that is authorised by Indian Railways to provide catering services to railways, online railway ticketing and packaged drinking water at railway stations and trains in India. It was listed on stock exchanges on October 14, 2019, and it had raised Rs 645 crore through the IPO.

The OFS would help the government inch forward in meeting the Rs 2.10 lakh crore disinvestment target.