One should Subscribed to IRCTC upcoming IPO Or Not??
For Listing Gains or For Investment?
IRCTC IPO REVIEW
🔷️YOY revenue growth 25%, PAT growth 23.6%, Total revenue March 2019 INR 1956.5 Cr Vs. 1569.5 Cr in March 2018, PAT as of March 2019 INR 273 Cr Vs. 220.6 Cr in March 2018. With having a small size of issue of INR 645 Cr the issue may be overwhelmed response and can be oversubscribed more than 50-60 times looking at current positive sentiments in Market.
🔷️Based on the current growth and monopolistic in ticketing segment of Indian railways with unique model. As per the current offer price of INR 320 the PE comes around 19 since there is no company listed in this segment so comparative is unavailable.
🔷️But its look like good price. Also offer for INR 10 discount for retailers and employees.
🔷️The President of India acting through the Ministry of Railways is the promoter of the company.
BUSSINESS OVERVIEW :
🔷️As a Central Public Sector Enterprise wholly owned by the Government of
India and under the administrative control of the Ministry of Railways, it is the only entity authorized by Indian Railways to provide catering services to
railways, online railway tickets and packaged drinking water at railway
stations and trains in India.
Company is incorporated with the objective to upgrade, modernize and
professionalize catering and hospitality services, managing hospitality
services at railway stations, on trains and other locations and to promote
international and domestic tourism in India through public-private
Company is conferred the status of Mini–Ratna (Category-I Public Sector Enterprise) by the Government of India, on May 1, 2008.
Currently IRCTC operate in four business segments, namely, internet ticketing,catering, packaged drinking water under the “Rail Neer” brand, and travel and Tourism
INTERNET TICKETING :
IRCTC is the only entity authorized by Indian Railways to offer railway tickets online through our website and our mobile application.
As of June 30, 2019, more than 1.40 million passengers travelled on Indian Railways on a daily basis, which consisted of approximately 71.42% of Indian Railways’ tickets booked online. As a result, there are more than 0.80 million tickets booked through http://www.irctc.co.in and “Rail Connect” on a daily basis.
IRCTC provide food catering services to Indian Railway passengers on trains and at stations. On-board catering services are referred to as mobile catering and catering services at stations are referred to as static catering.
Pursuant to the catering policy issued by Ministry of Railways dated February27, 2017, (“Catering Policy 2017”), IRCTC provide catering services for approximately 350 pre-paid and post-paid trains and 530 static units.
Packaged Drinking Water (Rail Neer): IRCTC is the only entity authorized by
the Ministry of Railways to manufacture and distribute packaged drinking water at all railway stations and on trains, according to CRISIL. They
manufacture and distribute packaged drinking water under brand name “Rail Neer”
Currently, they operate 10 Rail Neer plants located at Nangloi, Danapur, Palur,Ambernath, Amethi, Parassala, Bilaspur, Hapur, Ahmedabad and Bhopal, with an installed production capacity of approximately 1.09 million litres per day, which caters to approximately 45% of the current demand of packaged drinking water at railway premises and in trains.
TRAVEL & TOURISM :
IRCTC have been mandated by Indian Railways to provide tourism and travel related services. They have footprints in across all major tourism segments such as hotel bookings, rail, land, cruise and air tour packages and air ticket bookings, and are known as one of India’s leading travel and tourism companies catering to the needs of diverse tourist segments.
OVERALL VIEW :
One Should apply for listing gain as well as Medium To Longterm investment looking at sectors potential to Grow & Monopolistic Nature.
Disc – All views expressed are personal and only for study and Educational purpose. Consult your financial advisor before investing or taking any position based on above article.