IRCTC offer for sale oversubscribed, but stock declines more than 6%

Investors fear supply overhang; Centre has now reduced stake in firm by 25% in 3 years

Shares of state-owned Indian Railway Catering and Tourism Corporation (IRCTC) dropped more than 6 per cent on Thursday after the government launched a share sale to divest another 5 per cent stake in the railway ticketing firm. Experts said the continuous disinvestment in IRCTC by the government has created concerns of supply overhang, leading to value destruction in the much-fancied stock.

During its stock market debut in 2019, the government’s stake in IRCTC stood at 87.4 per cent. In the past three years, the centre has divested 25 per cent stake. After the latest offer for sale (OFS), the centre’s