BENGALURU - State-run Indian Railway Catering and Tourism Corp's (IRCTC) initial public offering (IPO) to raise 6.45 billion rupees ($90.89 million) was subscribed nearly 112 times by the end of the book-running process, stock exchange data showed.
Investors bid for 2.25 billion shares of the company, compared with 20.2 million shares on offer, according to data from the National Stock Exchange, as of 1230 GMT on Thursday.
The overwhelming response comes amid slowing growth in Asia's third-largest economy, which has hit sales of everything from cars to cookies, prompting the government to step in with deep cuts in corporate taxes and a raft of other measures to revive growth.
"IRCTC could see better valuation and a jump in EPS from second half of FY20 due to restoration of service charges which were halted after demonetization and the recently announced corporate tax rate-cut," said Deepak Jasani, head of retail research at HDFC Securities.
"It is also partly in the internet space and such companies are witnessing heightened investor interest."
The company is authorised by the railway ministry to offer Indian railway tickets online, offer catering service and exclusively manufacture and supply packaged drinking water at railway stations and on trains in India.
IRCTC operates in four business segments and also offers e-catering services to passengers via a mobile phone application.
The initial share sale is part of the government's divestment process to help meet its target to raise 800 billion rupees this fiscal year. In January, sources told Reuters that the government plans to meet this target through the sale of state-owned assets.
The government will hold a 87.4% stake in IRCTC after the IPO.
Earlier this year, government-run Rail Vikas Nigam Ltd and MSTC Ltd failed to garner as much attention as IRCTC, but were fully subscribed at the end of the subscription period.
The issue for IRCTC, which also handles holiday packages and pilgrimage tours for the Indian railways, comprises an offer for sale of 20.2 million shares at a price band of 315-320 rupees per share.
According to the red herring prospectus, IRCTC will not receive any proceeds from the offer and all proceeds will go to the government.
(Reporting by Chandini Monnappa in Bengaluru; Editing by Shounak Dasgupta)