Shares of IRCTC (Indian Railway Catering and Tourism Corporation Limited) listed on the bourses yesterday and had a dream debut. The company had launched its offer for sale of 2.016 cr shares in a price band of Rs 315-320 and was oversubscribed 111.95 times. The price discovery on BSE saw a price of Rs 644 while on NSE it was Rs 626.

The traded volume at price discovery was 6.10 lac shares on BSE while it was a staggering 36.89 lac shares on NSE. The high of the day was Rs 743.80 on BSE and NSE. The low of the day was Rs 625 on BSE and NSE. The close was Rs 728.60 on BSE, a gain of Rs 408.60 or 127.69%. It was Rs 727.75 on the NSE, a gain of Rs 407.75 or 127.42%. This performance by any PSU is a record by itself beating by a comfortable margin the performance of Power Grid. Power Grid Corporation of India Limited had listed on 5th October 2007 its shares which were offered at Rs 52. The issue was subscribed 64.82 times with QIB portion subscribed 115.90 times, HNI portion subscribed 40.34 times and retail portion 6.77 times. The issue opened at Rs 85, made a high of Rs 109.40 and closed at Rs 100.65, a gain of Rs 48.65 or 93.55%.

On a lighter note DIPAM would do well to take note of the fact that listings in October are good for PSU shares with Power Grid and IRCTC both happening in October.

In contrast the issue of IRCTC was subscribed 108.79 times by QIB’s, 354.42 times by HNI’s, 14.94 times by Retail investors and 5.82 times by Employees. The total issue was subscribed 111.95 times. The difference in response to IRCTC was the reintroduction of convenience fee which was discontinued when demonetisation took place. This reintroduction from September 2019 was the game changer for the valuation.

The total traded volume on the two exchanges combined was 507.10 lacs which was 2.51 times the IPO size of 201.6 lac shares. Delivery volume was 154.11 lac shares which was 30.39% of the traded volume but a staggering and mind boggling 76.44% of the IPO size. Weighted average of the day’s trade was Rs 691.97 on BSE and Rs 692.91 on NSE, clearly indicating that the share was under no pressure at any point of time. It also closed a good Rs 35-36 or 5% higher than the weighted average. This kind of delivery of the issue size is unprecedented as it implies that more than half the QIB’s have also sold on day one. One assumes that HNI’s who are leveraged would have cashed out while Retail investors lucky to have got 40 shares would have looked to book profits as a Diwali bonus.

There was only one institutional trade reported on the NSE. Reliance Mutual Fund bought 15 lac shares at the discovered price of Rs 626. With 76% of the shares offered in the primary issue changing hands very clearly there are people who believe that they have made enough money and hence exited. The other way of looking at it is that an equally large number of people believe that there is more to happen even now. Very clearly the share rally is not yet over and the July-September results would determine the course of action going forward. The convenience fee which in the current year 2019-2020 would be charged for seven months has the potential to double the profits for this year compared to last year as there was no convenience fee last year. The railways/government had granted IRCTC Rs 88 crs for the full year as compensation.

Whether it is the business model which is liked by investors who bought yesterday or it is a new rating for PSU stocks only time will tell. History will record the 14th of October 2019 as the day IRCTC made history.