IRCTC makes stellar debut, lists at 103% premium to issue price

Indian Railway Catering and Tourism Corporation (IRCTC) made a stellar debut on stock markets on Monday. The stock was listed at ₹644 apiece, a premium to its issue of ₹320 per share. The ₹645 crore initial public offering (IPO) was subscribed 112 times at a price band of ₹315- ₹320 per share. The issue was open for subscription between 30 September and 4 October.

In the last two financial years, IRCTC had clocked 10.3% annual growth, with revenues rising to ₹1,868 crore in the fiscal 2019. However, its profit after tax margins fell to 13.9% in FY19 from 14.3% in FY17 on higher expenses.

The company has high return ratios with return on capital employed (RoCE) and return on equity (RoE) of 25% with dividend payouts of more than 40% of net profits, over the past two years, higher than the regulatory norm of 30%. Healthy cash balances (more than the networth of the company) provides comfort against business uncertainties, said analysts.

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