Trains sit at Lokmanya Tilak Terminus (LTT) in the Kurla suburb of Mumbai, India, (Photographer: Dhiraj Singh/Bloomberg)

Indian Railways’ Units Plan Rs 1,500 Crore IPOs

Two rail CPSEs - IRFC and IRCON- are likely to come out with their initial public offerings in the next two months, which could together fetch about Rs 1,500 crore to the exchequer, official sources said.

While the Indian Railway Construction Co. has already approached the Securities Exchange Board of India with its IPO papers, the Indian Railways Finance Corporation would soon file the draft prospectus with the market regulator to seek its nod for initial share sale and subsequent listing.

The government plans to launch the IPO of these two central public sector enterprises after the resounding success of the RITES IPO, which was subscribed 67 times last month. The scrip listed on the bourses at a three percent premium.

"We are planning to float IPOs of IRCON and IRFC during August-September after the companies finalise their audit reports by the middle of this month," an official told PTI.

The government is divesting 10 percent stake or over 99 lakh shares through the IRCON IPO.

"We are hoping to garner Rs 1,000 crore from the IRFC IPO and about Rs 500 crore from IRCON," the official said.

Another rail PSU, RVNL-- a special purpose vehicle which mainly builds infrastructure for high speed rail-- had received the SEBI’s go-ahead last month to float an IPO by selling 2.08 crore equity shares or 10 percent stake of the government.

Besides rail central public sector enterprises , the other PSUs which have filed draft papers with the SEBI are Indian Renewable Energy Development Agency, Mazagon Dock Shipbuilders and the Garden Reach Shipbuilders & Engineers.

In the first three months of the current fiscal, the government has raised about Rs 9,000 crore via Bharat-22 ETF and the RITES stake sale.

The government has targeted to raise Rs 80,000 crore from PSU disinvestment in current fiscal, lower than over Rs 1.03 lakh crore last fiscal.

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