Pricing an initial public offering (IPO) is considered an art, for no small reason. One needs to look no further than the Indian Railway Catering and Tourism Corporation (IRCTC) IPO, which closed on Thursday, to understand why.
The numbers always tell a story. While the government had targeted a mop-up of ₹645 crore, IRCTC’s IPO saw bids amounting to a whopping ₹72,000 crore!
For a government that is desperately trying to shore up its revenues at a time when it has announced a reduction in the corporate tax rate and coping with falling Goods and Sevices Tax (GST) collections, this definitely is an opportunity missed.
Clearly, the Centre and its merchant bankers erred in conservatively pricing the issue.
Had they been more aggressive, the disinvestment receipts from the IRCTC offer for-sale would have been far higher. And that tells us why pricing an IPO is an art.
IRCTC is in a sweet spot as it is not only an e-commerce player but also enjoys a monopoly over the business of booking railway tickets online.
It has a monopoly over the catering of food served on trains.
It is exclusively authorized to manufacture and supply packaged drinking water at stations/trains.
Bu hikaye The Hindu Business Line dergisinin October 05, 2019 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye The Hindu Business Line dergisinin October 05, 2019 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
Covid Presents An Opportunity For India
India must attract investors exiting China post-Covid. Streamlining of project clearances and relaxation in FRBM norms will help
Did Alternative Assets Shield You From Covid-19 Volatility?
The assets closely linked to stock and debt markets could not stave off the losses
How To Put Aircraft To Bed
Preserving grounded planes, to get them up and flying at short notice, is a challenging task. Ashwini Phadnis captures the process
There Can Be No Going Back On WFH
Covid-19 has fast-forwarded the shift to ‘work from home’. However, some face-to-face connect will always be needed
UN, WHO Urged To Ensure ‘Benefit Sharing' Of Covid-Related Data
Biopharma firms should reach vaccines, medicines to poor nations at an affordable price, say civil society bodies
With No Clear Signal From Rlys, States Explore Ways To Bring Back Migrants
Quarantine centres, cross-country buses being arranged even as migrants hop on to boats, trucks and ambulances
Centre Allows All Neighbourhood Shops To Open But With Riders
Final call will be taken by local authorities; shopping complexes that draw fewer ‘outsiders’ are permitted to operate
Covid Impact Relatively Muted In India
Compared to Italy and the US, India’s rate of infection spread has been slow. This can be attributed to the strict measures in place
How Global Trade Will Fare Post-Covid
China isn’t likely to lose its pre-eminent position soon. India, for one, will need to make manufacturing globally competitive
How To Curb Harassment In The Virtual Office
Training and sensitisation are essential. Institute a strict dress code and chat etiquette to ensure professionalism during video calls