State-run Indian Railway Catering and Tourism Corporation (IRCTC), which is set to launch its initial public offer, is trading at over a 50 per cent premium over its issue price band in the unofficial grey market.
Analysts said improved market sentiment, the firm's monopoly in the business and relatively cheaper pricing of the IPO are driving investor interest in the grey market, usually a harbinger of the stock’s prospects on listing.
In the grey market, shares of IRCTC are changing hands at a premium of Rs 160 compared to its price band of Rs 315 to Rs 320 per share, said brokers.
The Rs 645-crore IPO of IRCTC will open on Monday and close on Thursday. The issue comprises an offer for sale of 2 crore shares by the Government of India and is a part of the government’s divestment process.
IDBI Capital Markets & Securities, SBI Capital Markets and YES Securities (India) are the book running lead managers to the offer which constitutes 12.6 per cent of the total paid-up equity.
Its sales rose 25 per cent year-on-year to Rs 1,899 crore, and profit grew 23.5 per cent to Rs 272.5 crore in FY19
IRCTC is offering a discount of Rs 10 per share to retail investors and employees.
“There is no competition, growth is likely to be reasonable over the next few years and valuations are not aggressive,” said Geetanjali Kedia, senior research analyst at SPTulsian.com.
A fund manager with a domestic brokerage said the stock could test Rs 600 in a month after listing.
No comments:
Post a Comment