The government plans to offload 15 per cent of its equity in Railway PSU RITES. Based on the closing price of Tuesday, such a move could bring in about ₹700 crore.

On Tuesday, the Department of Investment and Public Asset Management (DIPAM) of the Finance Ministry, issued Request for Proposals (RFP) for appointment of merchant bankers and selling brokers for the disinvestment in RITES. It is a public sector enterprise (PSE) under the Railway Ministry. It is a multi-disciplinary consultancy organisation in transport, infrastructure and related technologies.

The government, as on March 31, holds 87.4 per cent shares in the company. With the proposed disinvestment of 3 crore shares, the holding will come down to 72.4. This will be in line with the SEBI norms on minimum public shareholding of 25 per cent.

It may be recalled that during 2017-18, the Centre had disinvested 12.6 per cent in RITES. The investors’ response was very good then as the issue was subscribed by over 67 times.

However, it seems that the stock market is not too enthused with the news of another round of disinvestment, as the share price of RITES closed 3.96 per cent lower on Wednesday.

Capital structure

The authorised share capital of the company is ₹300 crore and the paid-up share capital ₹200 crore as on date. The company has been paying dividend consistently.

During the financial year 2018-19, company paid an interim dividend of ₹175 crore. Profit after tax (PAT) on standalone basis for the fiscal 2017-18 was ₹ 337 crore. Latest financial result show that PAT for the three-month period ended December, PAT was ₹175.5 crore. The company has a net worth of ₹2,192 crore.

 

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