Rail India Technical and Economic Services Ltd (RITES), a 100 per cent government-owned company, has announced plans to issue an initial public offering (IPO) of 25,200,000 equity shares, as part of its disinvestment plan.
The government plans to raise Rs 467 crore by disinvesting 12.6 per cent equity shares in the state-owned company
Rail India Technical and Economic Services Ltd (RITES), a 100 per cent government-owned company, has announced plans to issue an initial public offering (IPO) of 25,200,000 equity shares, as part of its disinvestment plan.
The subscription, with a price band of Rs 180-Rs 185 per equity share, will open on June 20. It will close two days later, on June 22.
“The Government had decided to disinvest 12.6 per cent of its equity and the cash flow will go directly to the government. About 25,200,000 shares will be offered. We expect to make Rs 467 crore at the higher price band of Rs 185 per share,” RITES Ltd Director of Finance Ajay Gaur told Outlook Money.
Gaur said that the government has to take the call on any further future offering,
The IPO will reserve 1,200,000 equity shares for subscription by eligible employees and a net 24,000,000 equity shares will be offered to the public.
The purpose is to carry out disinvestment of 24,000,000 equity share held by the selling shareholder in the company, which is equivalent to 12 per cent of the issued, subscribed and paid up equity share capital of the company.
The company hopes that the IPO will provide liquidity to its shareholders and enhance its visibility and brand image, .
A discount of Rs 6 per equity share on the offer price shall be offered to retail individual bidders and a discount of Rs 6 per equity share on the offer price to eligible employees.
Bids can be made for a minimum of 80 equity shares and in multiples of 80 equity shares thereafter. The floor price is 18 times of the face value and the cap price is 18.5 times of the face value of the equity shares.