Friends – Would like to share that I am applying for the IRCTC IPO opening tomorrow.
Even though we see IRCTC as a ticketing platform, their revenue mainly comes from Catering (55%) and Tourism (24%). The ticketing part gives only 12% of the overall revenue. IRCTC had a revenue of 1868 cr and net profit of 273 crores in FY 2019.
With the government increasing its investments in railways services, and with more and more Indians travelling, IRCTC is expected to grow well. Remember that IRCTC financials are more dependent on catering, tourism and drinking water and not ticketing.
I find the IPO attractively priced. At current FD rates of 7% – the risk-free PE is 14.3. This IPO is priced at a PE of 18 – that to me is good price.
I normally do not apply for IPO’s – the last one that I applied (and recommended) was D Mart in March 2017. But this is an exception.
The IPO opens on 30th Sept and closes on 3rd Oct 2019. I am applying for this and I would recommend this for you as well.