IRCTC shares rose nearly 1 per cent on Friday, after the government invited bids to sell part of its stake in the company. The Department for Investment and Public Asset Management (DIPAM) has issued an official Request for Proposal (RFO) in the regard. IRCTC or Indian Railway Catering and Tourism Corporation is the catering and ticketing service arm of Indian Railways. The IRCTC stock went up as much as 0.90 per cent to quote at Rs 1,359 during the session.
At 12:50 pm, IRCTC shares had pared some of the intraday gains but still traded half a per cent in the green.
"The GoI intends to disinvest a part of the paid up equity capital of IRCTC out of its shareholding through 'Offer for Sale (OFS) method of shares by promoters through the stock exchanges' as per Securities and Exchange Board of India (Sebi) Rules and Regulations," according to the official request for proposal.
According to the document, the merchant bankers will have to submit their bids by September 10.
The government currently holds a 87.40 per cent stake in IRCTC. In order to meet capital market regulator Sebi's public holding norms, it has to trim its stake in the company and bring it down to 75 per cent.
IRCTC's Offer for Sale (OFS) will help the government inch forward in meeting its annual disinvestment target of Rs 2.10 lakh crore.
Out of which, Rs 1.20 lakh crore will come from the disinvestment of public sector undertakings and another Rs 90,000 crore from financial institutions.
According to news agency Press Trust of India, the Department for Investment and Public Asset Management has not been able to sell stake in any central public sector enterprise so far in the current fiscal year due to the coronavirus pandemic.
However, through its corporate debt exchange traded fund, Bharat Bond ETF-II, the government has garnered subscription worth Rs 11,000 crore for the central public sector companies' "AAA" rated bonds.