RITES To Buy 25% In State-Run Peer IRSDC
RITES’ initial public offering to raise Rs 460 crore on June 20.
Transport infrastructure consultant RITES Ltd. will buy one-third stake worth Rs 250 crore in state-run peer tasked with development of railway stations — Indian Railway Stations Development Corporation Ltd.
“Our board has considered this and in-principle we have conveyed to them [IRSDC] that we are ready for up to 25 percent participation,” Rajeev Mehrotra, chairman and managing director of RITES, told BloombergQuint on the sidelines of a press conference organised to launch the company’s initial public offer. The investment, funded through the company’s internal accruals, will start flowing out from the July-September quarter, he said.
RITES, a consultant to the Ministry of Railways, will launch its three-day initial public offer on June 20. The issue, a pure offer for sale, will see the government offloading 12 percent stake to raise about Rs 460 crore at Rs 180-185 apiece.
The book-running lead merchants to the offer are Elara Capital (India), IDBI Capital Markets & Securities, IDFC Bank and SBI Capital Markets.
This is the first public-sector company servicing Indian railways to go public. The government also plans to divest its stake through IPOs in two other rail firms — Indian Railway Finance Corporation Ltd. and IRCON International Ltd., according to the draft red herring prospectus filed with Securities and Exchange Board of India. That will help the government meet its divestment target of Rs 80,000 crore for the ongoing financial year.