A worker carries a sledgehammer as he walks along rail tracks in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Government To Raise Rs 467 Crore Via 10% Sale In IRCON International 

The government plans to divest around 10 percent in its railway subsidiary IRCON International Ltd. to raise around Rs 467 crore.

The company has fixed the price band at Rs 470-475 apiece for its proposed initial public offering. The three-day maiden offer, which opens on Sept. 17, comprises an offer for sale of 9,905,157 shares by the government.

IRCON International is an integrated Indian engineering and construction company, specialising in infrastructure projects, including, railways, highways, bridges, aircraft maintenance hangars, runways, electrical and mechanical works, commercial and residential properties, development of industrial areas, among others.

“We have an order book of Rs 22,400 crore as of March 31. These are the orders under execution,” Sunil Kumar Chaudhary, chairman and managing director at the company told BloombergQuint in an interview. Nearly 80 percent of these orders are from the railway sector, 10 percent for construction of highways, bridges and flyovers and the remaining are for other infrastructure and electrification projects, he said.

The company secured Rs 610 crore worth new contracts as of March 31, according to its red herring prospectus, as its order book grew about 19 percent, compared with the previous fiscal year. About 87 percent of these orders were in the railway sector, as the company undertook 33 projects in 13 states in India and in two countries abroad.

The contribution of foreign orders, which stood at 7 percent of the total order book, is expected to increase, said Chaudhary. “There has been a dip in this (foreign portfolio) in the last three-four years. Now we are negotiating and are in advanced stage of identifying foreign projects. The ratio of foreign projects will go up to 20-25 percent within a year.”

The company has five overseas offices in Sri Lanka, Bangladesh,Malaysia, South Africa and Algeria to provide onsite support for its overseas projects, according to its red herring prospectus.

The company commenced operations in 1976 and provides engineering, procurement and construction services for infrastructure projects. It also executes on build, operate and transfer mode.

In June this year, railway consultancy firm RITES successfully listed on the exchanges. In the first three months of the ongoing financial year, the government has raised about Rs 9,000 crore through Bharat-22 Exchange Traded Fund and RITES stake sale. The government targets to raise Rs 80,000 crore from divestment of public sector undertakings this financial year compared with Rs 1.03 lakh crore it raised in 2017-18.

(With inputs from PTI)