Follow the IPO, government's stake in IRCTC, which manages several aspects of services offered by Indian Railways, will reduce by 12.5 per cent. (Photo: Image for representation)

State-run Indian Railway Catering and Tourism Corporation (IRCTC) is all set to launch its Initial Public Offering (IPO) on September 30 to raise up to Rs 645 crore. The price band of the shares has been set at Rs 315-320 each.

With the IPO, the government aims to raise Rs 635.04-645.12 crore by October 3, when the issue closes. A total of over two crore shares, each valued at Rs 10, will be part of the issue and is a part of the government's full-year divestment process.

It is worth noting that IRCTC will not receive any proceeds as it is an offer for sale issue; the government's stake in IRCTC, which manages several aspects of services offered by Indian Railways, will reduce by 12.5 per cent after the IPO.

Both the floor price (lowest) and the cap price (highest) are over 30 times the face value of the equity shares. An additional 1.6 lakh shares have been reserved for employees, taking the total offer size to 12.6 per cent of total paid-up equity.

Of the equity stocks on sale as part of IPO, at least 50 per cent will be available for allocation to qualified institutional buyers including two lakh shares for the mutual fund portion on a proportionate basis, reported Business Today.

At least 15 per cent of the IPO offer will be available to non-institutional buyers category and around 35 per cent will be made available to retail category.

The fresh IRCTC IPO is part of the government's divestment programme, under which it aims to raise Rs 90,000 crore through disinvestment in the current fiscal. Last year, the government had raised Rs 85,000 crore.

The book running lead managers to the IRCTC IPO offer are IDBI Capital Markets & Securities Limited, SBI Capital Markets Limited and Yes Securities (India) Limited.