The Hindu Business Line : RITES initial public offering likely in April

Capex plans
RITES would raise funds through issue of one crore fresh equity shares.
Post IPO, the paid up equity of RITES will be Rs 5 crore.
Recently it issued bonus shares in the ratio of nine shares for one share (increasing the paid up capital to Rs 40 crore from Rs 4 crore) and split the face value of its shares to Rs 10 from Rs 100.

Our Bureau

New Delhi, Jan. 10 Initial public offering (IPO) for the Railway Ministry subsidiary RITES is likely to hit the market by April with Union Cabinet on Thursday giving its nod for reducing Government holding in the company to 72 per cent. The company, which is entirely held by the Government currently, would raise funds by issuing fresh equity and sale of existing shares. The lead managers for the IPO are Kotak, Enam and ICICI Securities.

Proposals

RITES would raise funds through issue of one crore fresh equity shares (with a face value of Rs 10) and offloading 40-lakh Government shares. Out of the 1.4 crore shares, 10 per cent shares would be reserved for employees, 15 per cent to high net worth individuals, 25 per cent to retail investors and 60 per cent to qualified institutional buyers. Post IPO, the paid up equity of RITES will be Rs 5 crore against the current Rs 4 crore.

“The Cabinet Committee on Economic Affairs (CCEA) approved a proposal for raising fresh equity through IPO of one crore shares,” Mr P. Chidambaram, Finance Minister, said here today. “The current book value of the shares is Rs 115,” Mr Chidambaram said.

Bonus shares

In run up to the IPO, RITES recently issued bonus shares in the ratio of nine shares for one share (increasing the paid up capital to Rs 40 crore from Rs 4 crore) and split the face value of its shares to Rs 10 from Rs 100.

“The company is hopeful of coming out with a public issue as soon as possible given the buoyant market condition, maybe around March-April,” said sources in the know.

RITES has entered in the emerging business of concession of existing Railway lines, build operate transfer of rail and infrastructure project, leasing of rail equipment. The company has accumulated reserves of Rs 521 crore as of September 30, 2007. RITES has an operational experience in over 60 countries and is a multi-disciplinary organisation of consultants, project managers and engineers in transport and infrastructure sector.

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