Wednesday, October 4

Railway PSU RITES aims for $550 Mn valuation in IPO

The public sector undertaking (PSU) of Indian Railways, RITES is looking forward to Rs. 3700 crore valuation in its initial public offering slated for June 20-22.

RITES, which is a state-owned railway consultant has designated a price band of Rs. 180-185 apiece resulting in an IPO size of Rs 466.20 crore.

Additionally, there is a Rs. 6 discount that will be given to retail investors and eligible employees. According to the sources, the proposed IPO will involve a sale of 25.2 million shares by the government which also includes the stock reserved for the employees.

Meanwhile, another news is ongoing rounds regarding RITES likely to acquire around 25 per cent stake in Indian Railway Stations Development Corporation (IRSDC), the nodal agency for the redevelopment projects. The government is aiming to rebuild around 600 stations for which it has approached other railway PSU’s too.

Rajeev Mehrotra, Chairman and MD of RITES said,

We were approached to participate in equity for station development projects, where IRSDC is evolving a better model for investment. We, in principle, approved Rs 2.5 billion for this in the March board meeting

The RITES IPO is being managed by merchant bankers Elara Capital, IDBI Capital Markets, IDFC Bank and SBI Capital Markets Company. RITES was included under the ministry of railways in 1974. It is a company that deals in business consultancy of transport infrastructure for railways and other sectors such as roads and highways, urban transport, inland waterways, airports, institutional buildings and renewable energy.

The state-owned PSU has also reported a consolidated net profit of Rs. 252.5 crore for nine months that ended December 2017 as filed in its red herring prospectus.