The Central Government of India will sell up to a 5% stake in Indian Railway Catering and Tourism Corporation (IRCTC) through an offer for sale (OFS) on the Bombay Stock Exchange and National Stock Exchange on 15 and 16 December. This move is part of the government's efforts to meet its steep divestment target for the 2022-23 financial year.
On Day 1, i.e. 15th Dec, IRCTC was oversubscribed by 3.08 times by institutional investors. Let's see how retail investors bid on it today.
The floor price for the OFS has been fixed at ₹680 ($9.26) per share, representing a discount of over 7% compared to the closing price of INR 733.50 ($9.97) on the day of the announcement. At this price, the sale of a 5% stake in IRCTC could raise approximately INR 2,720 crore ($370 million).
The government plans to sell a 2.5% stake in IRCTC, with the option to offload an additional 2.5% if necessary. Up to 4 Crore equity shares will be offered in the OFS, according to a regulatory filing by the state-owned firm.
The OFS will take place on a separate window of the stock exchanges on 15 and 16 December, from 9:15 am to 3:30 pm on both days. Only non-retail investors will be able to place bids on 15 December, while retail investors will be able to place bids on 16 December.
The OFS is being managed by Axis Capital, Citigroup Global Markets, Goldman Sachs, and JM Financial. For the quarter ended September 2022, IRCTC's net profit after tax from continuing operations rose by 42.5% to INR 226 crore ($30.7 million). However, this represented a sequential drop of 7.7% from the INR 245.5 crore ($33.3 million) recorded in the previous quarter.
The government's disinvestment target for the year is INR 65,000 crore ($8.9 billion). In November, the government raised INR 3,839 crore ($521 million) from the sale of Axis Bank shares held by a government investment vehicle.
IRCTC is the tourism and catering arm of the Indian Railways. The government currently owns a 67.4% stake in the company, which has a market capitalization of INR 58,792 crore ($7.9 billion). Ahead of the OFS announcement, IRCTC shares closed 1.47% higher at INR 733.50 each on the NSE.
Now, will the apparent arbitrage advantage be lost in a few sessions is the question... Already @ 689 today, just of no use I guess...
Agnivo007 wrote:Now, will the apparent arbitrage advantage be lost in a few sessions is the question... Already @ 689 today, just of no use I guess...
Buy around 550
maddydilip wrote:cut off at 680 how can we apply at 550?Buy around 550
rockfort_raja wrote:550 tak down jayega. Tab buy karlena
cut off at 680 how can we apply at 550?
maddydilip wrote:Buy around 550
Even at 550 It is overpriced. The stock had a rally in covid boom and it got extra fuel when railway services restarted after 2nd covid wave. I remember, stock got tripled in price just in 3 months before crash. (and foolish Zee Business Editor kept telling to invest more, when I could clearly see it was going to crash)
What was happening then was unlogical. What is happening now is more logical.
There is no fundamental logic to buy a PSU company @ 300 PE. May be it 280 to 330 is fair price. The correction requires 12 to 24 months. Till then stock will continue in negative trend
hi10 wrote:
Even at 550 It is overpriced. The stock had a rally in covid boom and it got extra fuel when railway services restarted after 2nd covid boom. I remember, stock got tripled in price just in 3 months before crash. (and foolish Zee Business Editor kept telling to invest more, when I could clearly see it was going to crash)
What was happening then was unlogical. What is happening now is more logical.
There is no fundamental logic to buy a PSU company @ 300 PE. May be it 280 to 330 is fair price. The correction requires 12 to 24 months. Till then stock will continue in negative trend
IRCTC P.E now is 59 and during March 20 lows it was available at P.E. 42..it's intrinsic value is 229 as per screener and it's gonna never available at that price ever.
maddydilip wrote:IRCTC P.E now is 59 and during March 20 lows it was available at P.E. 42..it's intrinsic value is 229 as per screener and it's gonna never available at that price ever.
But 42 PE [email protected] rupees. At the peak, it was 300.
Maybe it had good financial results in last year. Because of this PE may have improved to 59.
Traditionally, Indian PSU does not trade above 20 PE. Moreover when negative trend catches on, even excellent stocks do not perform.
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I was just interpreting him. No personal views.
Now, will the apparent arbitrage advantage be lost in a few sessions is the question... Already @ 689 today, just of no use I guess...