Railway consultancy firm RITES Ltd’s initial public offer (IPO) opened for subscription on Wednesday, as part of the government’s plans to offload its stake in various public sector enterprises.
The government plans to sell 12% stake in the wholly-owned Miniratna enterprise, reports news agency PTI. The issue for 2.52 crore equity shares will remain open from June 20 to June 22, in the price band of Rs 180 – Rs 185. The shares will be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
The share sale could raise as much as Rs 460 crore on the upper end of the price band.
Central public sector enterprises (CPSEs) which have made profits in the last three years continuously, and have positive net worth are eligible to be categorised as Miniratna companies.
RITES Ltd is the first public sector enterprise to be listed in fiscal year 2018-19. In March, PSUs Hindustan Aeronautics Ltd (HAL) and Bharat Dynamics Ltd had made their primary market debut.
RITES Ltd is an engineering consultancy established by the government in 1974 under the Indian Railways.
After the RITES IPO, the government also plans to divest its stake in two more of its railway PSUs – RVNL and IRFC in the July-September quarter, said PTI quoting a senior government official.
While an RVNL IPO could fetch about Rs 500 crore, the government could raise about Rs 1,000 crore from IRFC, according to media reports.
Rail Vikas Nigam Ltd is a special purpose vehicle (SPV) which executes Railway projects for the Golden Quadrilateral connecting the four major Indian metros. Indian Railway Finance Corporation (IRFC) is the financing arm of the Indian Railways.
Prasanta Patnaik