 "Listing of rail PSUs on track; decision on IRCTC service charge by June 30")
The listing plans of three railway public sector undertakings — Indian Railway Finance Corporation (IRFC), Indian Railway Construction Company (Ircon), and Indian Railway Catering and Tourism Corporation (IRCTC) — are on track despite concerns over IRCTC giving an exemption from service charge on online tickets.
According to sources close to the development, bid managers have been appointed for all the three companies and the government is likely to take a call on IRCTC’s service charge by June 30.
Service charges on online train tickets were exempted from November 23, 2016, to March 31 this year to boost the digital mode of transactions among passengers. This was later extended to June 30.
“We are of the belief that the government is likely to withdraw this incentive after June 30, because the company is about to be listed. This would affect the valuation of the company,” said a senior railway official close to the development.
Union Finance Minister Arun Jaitley in his Budget speech had announced the plan of listing the three PSUs.
For IRFC, SBI Cap, ICICI Securities, IDFC, and HSBC have been appointed bid managers. On the other hand, SBI Cap, IDBI, and Yes Bank are in charge of IRCTC, and IDBI will be the manager for Ircon.
“The listing is likely to happen within six months. The department of investment and public asset management (Dipam) has asked these companies to speed up the work and come up with a valuation soon,” the official added.
An annual waiver of service charge will lead to a loss of about Rs 500 crore on the revenues of IRCTC. Before the offer was rolled out, IRCTC used to charge Rs 40 per ticket for bookings in air-conditioned classes and Rs 20 per ticket in sleeper classes.
Service charge was a major revenue source for IRCTC as the company posted an income of Rs 551 crore from railway ticketing in 2015-16, up from Rs 256 crore in 2014-15.
Of its monthly share on service charge, 50 per cent used to go to the railways’ kitty.
According to sources close to the development, bid managers have been appointed for all the three companies and the government is likely to take a call on IRCTC’s service charge by June 30.
Service charges on online train tickets were exempted from November 23, 2016, to March 31 this year to boost the digital mode of transactions among passengers. This was later extended to June 30.
“We are of the belief that the government is likely to withdraw this incentive after June 30, because the company is about to be listed. This would affect the valuation of the company,” said a senior railway official close to the development.
Union Finance Minister Arun Jaitley in his Budget speech had announced the plan of listing the three PSUs.
For IRFC, SBI Cap, ICICI Securities, IDFC, and HSBC have been appointed bid managers. On the other hand, SBI Cap, IDBI, and Yes Bank are in charge of IRCTC, and IDBI will be the manager for Ircon.
“The listing is likely to happen within six months. The department of investment and public asset management (Dipam) has asked these companies to speed up the work and come up with a valuation soon,” the official added.
An annual waiver of service charge will lead to a loss of about Rs 500 crore on the revenues of IRCTC. Before the offer was rolled out, IRCTC used to charge Rs 40 per ticket for bookings in air-conditioned classes and Rs 20 per ticket in sleeper classes.
Service charge was a major revenue source for IRCTC as the company posted an income of Rs 551 crore from railway ticketing in 2015-16, up from Rs 256 crore in 2014-15.
Of its monthly share on service charge, 50 per cent used to go to the railways’ kitty.
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