Shares of Indian Railway Catering and Tourism Corporation (IRCTC) fell nearly 5.55% to ₹694.05 apiece in early trade on Thursday after the government proposed to sell its stake in the company through an offer for sale at a floor price of ₹680 per share, a 7.47% discount to the stock's Wednesday closing price of ₹734.90.
At 12:00 p.m., the stock was trading at around ₹694.15, down by 5.48% on the BSE.
The base issue size for the OFS is 2 crore shares, or 2.5% of the total, and there is an option to keep the additional 2.5% of over-subscription, bringing the total issue size to 4 crore shares, or 5% of the total. The government will get a net of ₹2,720 crore after offloading its stake.
The OFS will open for subscription by institutional investors on Thursday and on Friday for retail investors.
Following the development, the stock opened lower at ₹698.50 apiece compared to the previous closing price of ₹734.90 and dipped further to hit an intraday low of ₹694.05. At current levels, the stock is trading at an 11-week low.
YTD, the stock has dropped from around ₹831.75 to the current level of ₹696.25, showing a 16.29 percent decline. The stock, however, has generated a staggering return of 301.59 percent over the past two years.
The stock made a strong debut on October 14, 2019, when it was listed at a premium of 101% at ₹644 over the IPO price of ₹320 and closed at ₹728.6, a 127.7% premium over the issue price, on the first day.
In August 2021, the company announced a 1:5 stock split to increase market liquidity, broaden the shareholder base, and make shares more accessible to small investors. At the time of the announcement, the stock was trading at around ₹2,750 apiece. Just two months after the announcement, the stock rose to ₹5,593.85 per share. The shares of the company have been quoted on an ex-split basis since October 28, 2021.
For the September-ending quarter, the company reported a 42.54% rise in its standalone net profit to ₹226 crore compared to ₹158.57 crore in the same quarter of the previous fiscal. However, sequentially, the net profit was down 7.95%. In the first quarter of the current fiscal year, the company reported a net profit of ₹245.52 crore.
Revenue from operations increased 97.53% to ₹831.8 crore during the quarter, compared to ₹421.1 crore in the corresponding quarter of the previous fiscal.
EBITDA margin came in at 37.83%, down 1,440 basis points (bps) from the same quarter of last year. However, quarter on quarter, the margin was up 19 bps.
The Indian government owns 67.40 percent of the shares in the company, while foreign portfolio investors and domestic institutional investors each own 5.8 percent and 5.6 percent, respectively. Regular shareholders own 21.2 percent, Trendlyne data showed.
An average of 06 analysts polled by MintGenie have a 'sell' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.