IRCTC IPO: Information analysis

A central public sector enterprise, Indian Railway Catering and Tourism Corporation (IRCTC) is wholly-owned by the Government of India and under the administrative control of the Ministry of Railways. The IPO of IRCTC is part of the government's ambitious disinvestment programme aimed at raising Rs 1.05 lakh crore in the current financial year. The company operates four business segments, namely internet ticketing (12 per cent of FY19 revenues), catering (55 per cent), packaged drinking water (9 per cent) and travel and tourism (23 per cent of revenues). Strengths IRCTC is the only entity authorised by Indian Railways to offer online railway tickets. The company charges a convenience fee of Rs 15 and Rs 30 for non-AC and AC tickets, respectively. Earlier in November 2016, the government removed these charges to promote the digitisation of payments. However, from September 1, 2019, the company was allowed to collect fees, which will increase its revenues in the coming quarters. IRCTC is also the only entity authorised to manage catering services on trains and major static units at railway stations. Changes in the Catering Policy of 2017 mandating only IRCTC for catering in trains resulted in revenue jump of 2.5-times in the catering segment between 2017 and 2019. The company also enjoys a monopoly in packaged drinking water. It is the only entity authorised by the Ministry of Railways to manufacture and distribute packaged drinking water at all railway stations and trains under the "Rail Neer" brand. IRCTC is all set to operate the new New Delhi- Lucknow Tejas Express - scheduled to be inaugurated on October 5, 2019, which will be the first privately operated long-distance train in India. It also provides luxury tourism packages, comprising special luxury trains such as Buddhist Circuit Train and Maharajas' Express. Weakness Being in the catering business, the company has to m