Railways is eyeing INR 500 Cr through the IPO of IRCTC and INR 1,000 Cr with IRFC
IRCTC’s prospectus will be filed soon, while IRFC’s prospectus will be ready after the elections
The government had approved public listing for five railways companies in 2017
Railways-owned Indian Railway Catering and Tourism Corporation (IRCTC) and Indian Railway Finance Corporation (IRFC) are planning to raise INR 1500 Cr through initial public offerings (IPO) by September this year, PTI has reported. A final call will be taken on this after the elections.
IRFC, which falls in the purview of the Ministry of Railways, raises funds through borrowing and from capital markets for expansion plans of the Railways. On the other hand, IRCTC is the unit that handles nearly all of the customer-facing functions of the Railways, primarily ticketing and catering.
Earlier this year, the Finance Ministry had initiated the process of launching IRFC’s IPO but the company had then informed the Railway Ministry that such a move will bring up their cost of borrowing.
An official told PTI, “We are working to bring IPO of Indian Railway Catering and Tourism Corporation (IRCTC) and IRFC by September. IRFC may have to go to Cabinet again after elections.”
The government is looking to raise INR 500 Cr with the IPO of IRCTC and INR 1000 Cr with IRFC’s public listing.
The draft red herring prospectus for IRCTC will be filed with SEBI soon, the official informed PTI, while adding that, “for IRFC, it would be after the elections get over and the government is formed.”
Earlier in the month, Department of Investment and Public Asset Management divested 12.12% stake in Rail Vikas Nigam Ltd (RVNL) raising about INR 480 Cr. RVNL is a special purpose vehicle tasked primarily with building infrastructure for high speed rail.
Cabinet Committee on Economic Affairs in 2017 had approved public listing for five companies under the Ministry of Railways namely, IRCON international, RITES, RVNL, IRFC and IRCTC. Two of these, IRCON international and RITES were listed during the last financial year.
The Central Public Sector Enterprises (CPSE) divestment targets for 2019-2020 are set to INR 90K Cr. The divestment proceeds in 2018-2019 crossed INR 85K Cr against Revised Estimate of INR 80K Cr.