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The initial public offering of Railways’ public sector unit — RITES — is likely to hit the market between June 20 and 22. About 12 per cent shares of the Railways’ subsidiary will be offered for sale, according to sources in the know.
With this, RITES will become the second public sector unit (PSU) of the Indian Railways to be listed on the bourses. Container Corporation of India was the first such company. RITES had filed the draft red herring prospectus (DRHP) in January this year.
The Finance Ministry had, in 2017-18, planned to offload stakes in several Railway PSUs, including RITES, RVNL, Ircon, IRFC and IRCTC.
RITES recorded a revenue of ₹1,509 crore in fiscal 2017, according to its annual report. The Miniratna company has an order book of ₹4,808 crore, till November 2017, with three-fourth of the order book being contributed by government bodies, according to the DRHP.
RITES has also been approached by Indian Railway Station Development Corporation (IRSDC) to buy up to 25 per cent stake in the station development arm for ₹250 crore, according to the DRHP.
The RITES spokesperson could not be contacted.
Consultancy services
The Miniratna company, which gets a substantial revenue (over 40 per cent) from consultancy services, gets other revenues from export sales, lease services, quality assurance and turnkey project implementation. It has also diversified into renewable energy and electricity management through a subsidiary — Railway Electricity Management Corporation, which is a joint venture between RITES and the Railway Ministry in 51:49 ratio.
It also has another subsidiary — a joint venture with SAIL — which has the business of making, selling, importing-exporting locomotives and wagons. In addition, RITES holds a 26 per cent stake in BNV Gujarat Rail Pvt Ltd, a firm largely held by Shapoorji Pallonji Road Pvt Ltd (67 per cent) with the remaining stake held by PCM Cement Concrete Pvt Ltd, a special purpose vehicle formed to build and operate the Bhuj-Naliya-Vayor Rail Project.
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