Shares of IRCTC plunged over 10% on Thursday after the company announced that the government will sell up to 20% stake in the company through an offer for sale (OFS). IRCTC shares on the BSE closed at Rs 1,451.95, down 10.27%.

Yash Gupta, Equity Research Associate with Angel Broking said that shares of the company fell as the company announced OFS of up to 2.40 crore shares with option of additional sell of 0.8 lakh shares with floor price of Rs 1,367 per share.

Company has fixed OFS has a cut-off date for non-retail investors of December 10, 2020 and December 11 for retail investors. The IRCTC share sale will take place on a separate window of the stock exchanges on December 10 and December 11. Only retail investors shall be allowed to place their bids on December 11.

In a regulatory filing on Wednesday, the company 10% of the OFS has been reserved for retail investors and 5% reserved for the employees. Company has fixed the floor price of Rs 1,367 for OFS which is 8.86% lower than the CMP of Rs 1,500.

The Union government proposed to sell up to 2.40 crore shares or 15% of the paid-up equity share capital of IRCTC through the offer of sale route. It has also proposed an additional share sale of up 80 lakh equity shares of 5% of the paid-up equity share capital, in case of oversubscription. In total, the base offer size and oversubscription option represent 20% of outstanding equity shares of the company.

The Twitter handle of the Secretary of Department of Investment and Public Asset Management (DIPAM) said on Wednesday: "Offer for Sale in IRCTC opens tomorrow for Non Retail investors. Day 2 for retail investors. Govt. would divest 15% equity with a 5% green shoe option."