The government has begun the process of shedding its stake in Indian Railway Catering and Tourism Corp (IRCTC), a move that will help it move closer to its FY21 divestment target.
The Centre on August 20 invited bids from merchant bankers for the IRCTC stake sale, setting a deadline of September 10.
"The GoI intends to disinvest a part of the paid up equity capital of IRCTC out of its shareholding through 'Offer for Sale (OFS) method of shares by promoters through the stock exchanges' as per Securities and Exchange Board of India (SEBI) Rules and Regulations," DIPAM said while inviting Request for Proposal (RFP), as quoted by PTI.
The government currently holds 87.40 percent stake in IRCTC. To meet SEBI's public holding norm, the government has to lower its stake in the company to 75 percent.
The IRCTC OFS will help the government move closer to its Rs 2.10 lakh crore disinvestment target. Of this, Rs 1.20 lakh crore will come from disinvestment of public sector undertakings and another Rs 90,000 crore from stake sale in financial institutions.
The Department of Investment and Public Asset Management (DIPAM) has not been able to sell stake in any CPSE during 2020-21, since the coronavirus outbreak has impacted equity markets. However, through Bharat Bond ETF-II, the government has garnered subscription worth Rs 11,000 crore for 'AAA' rated bonds of CPSEs.
DIPAM Secretary Tuhin Kanta Pandey had last month said restrictions on international travel due to COVID-19 pandemic have put brakes on strategic disinvestment of CPSEs, like Air India and BPCL, but completing the transactions remains a priority of the government.
(With inputs from PTI)