- In the last seven years, the Modi government has not only made efforts to privatize the loss-making PSUs but also invested in making the needed PSUs more efficient.
- One such success story in recent years is of IRCTC. In the last seven years, the previous railway ministers Suresh Prabhu and Piyush Goyal, as well as the incumbent minister Ashwini Vaishnaw, made tremendous efforts to improve IRCTC.
- IRCTC’s revenue has increased consistently in the last few years, and it posted very solid profits. The Indian Railways has started offering numerous services including food stalls and packed water under IRCTC and this puts the company on a solid growth trajectory for the next few years.
- With the Modi government in power, private as well as public companies are showing tremendous potential because a rule-based capitalist economic system has been established.
In the last seven years, the Modi government has not only made efforts to privatize the loss-making PSUs but also invested in making the needed PSUs more efficient. From HAL to DRDO, Oil Marketing Companies to Public Sector Banks – the PSUs are being strengthened and made more efficient, transparent, and investor-friendly.
One such success story in recent years is of IRCTC. In the last seven years, the previous railway ministers Suresh Prabhu and Piyush Goyal, as well as the incumbent minister Ashwini Vaishnaw, made tremendous efforts to improve IRCTC. In 2019, the government announced the IPO of India Railway Cater and Tourism Corporation at the price of 320 and the market prices opened at more than double the price of around 720.
Since then, the investors have remained buoyant of IRCTC. The share price crossed 5,000 rupees – almost 19 times more than the IPO price and 7 times the listing price – with the total market capitalization crossing 1 lakh crore rupees. Although the prices declined later the jump made the IRCTC touch the landmark which only 8 PSUs have touched before it.
Before IRCTC, 8 other public companies, namely State Bank of India, Coal India Ltd, NMDC Ltd, Indian Oil Corp. Ltd, Power Grid Corp. Ltd, SBI Life Insurance, Bharat Petroleum Corp. Ltd and SBI Cards, have touched this milestone.
IRCTC’s revenue has increased consistently in the last few years, and it posted very solid profits. The Indian Railways has started offering numerous services including food stalls and packed water (Rail Neer brand) under IRCTC and this puts the company on a solid growth trajectory for the next few years.
“IRCTC as a company is a pure monopoly business and the recent surge in stock prices is giving great reward to shareholders on the back of unlocking the economy and upcoming festival season which will boost the company’s revenue,” said Akhil Rathi, vice president advisory at Marwadi Financial Services.
Incorporated in 1999, IRCTC was granted the Miniratna (Category-I Public Sector Enterprise) status in 2008. The IRCTC IPO has emerged as one of the most valued initial public offerings (IPOs) among public-sector undertaking (PSU) IPOs ever. The huge demand for shares of IRCTC shows the intrinsic value investors see in the company and the growth they anticipate from it.
The Indian government diluted a 12.6 percent stake in the company in an initial public offering (IPO) 2.02 lakh shares at the base price of 10 rupees per share. But the investors demanded 225 crore shares of the company and the total bid was worth 72,000 crore rupees at the upper price band. The shares were sold at a price band of 315-320 rupees per share. And now they are around 5,000 rupees per share.
With the Modi government in power, private as well as public companies are showing tremendous potential because a rule-based capitalist economic system has been established. The next big PSU IPO would be of LIC, which is expected to touch market capitalization of 3-4 lakh crore rupees.