MUMBAI, (GNI): Rajeev Mehrotra, Chairman and Managing Director – RITES Limited during announcement of IPO, in Mumbai – photo by Sumant Gajinkar
MUMBAI, (GNI): L-R: Abhijit Das – Elara Capital (India) Pvt Ltd, Nalin Kumar – IDBI Capital Markets Securities Ltd, Mukesh Rathore, Director (Technical) – RITES Ltd, Rajeev Mehrotra, CMD – RITES Limited, Ajay Kumar Gaur, Director (Finance) – RITES Limited, Anant Sinha – SBI Capital Markets Ltd during announcement of IPO in Mumbai – photo by Sumant Gajinkar
• Net Offer of up to 24,000,000 Equity Shares.
• Employee Reservation Portion of up to 1,200,000 Equity Shares
• A discount of Rs. 6 per Equity Share on the Offer Price shall be offered to Retail Individual Bidders (“Retail Discount”) and a discount of Rs. 6 per Equity Share on the Offer Price may be offered to Eligible Employees Bidding in the Employee Reservation Portion (“Employee Discount”)
• 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.
• Offer Opening Date – Wednesday, June 20, 2018 and Offer Closing Date – Friday, June 22, 2018.
• The Offer and Net Offer shall constitute 12.60% and 12% of the post-Offer paid-up Equity Share capital of the Company respectively.
MUMBAI, (GNI): RITES Limited, wholly owned Government Company, a Miniratna (Category – I) Schedule ‘A’ Public Sector Enterprise, is proposing an initial public offering of its Equity Shares (“IPO” or the “Offer”) which is scheduled to open on Wednesday, June 20, 2018 and close on Friday, June 22, 2018 with a Price Band of Rs.180 – Rs. 185 per Equity Share of face value of Rs. 10 each of the Company (the “Equity Shares”).
The Initial Public Offering of 25,200,000 Equity Shares, an Offer for Sale by the President of India, acting through the Ministry of Railways, Government of India. The IPO consist of reservation of 1,200,000 Equity Shares for subscription by Eligible Employees and Net Public Offer of 24,000,000 Equity Shares.
The objects of the Offer are (i) to carry out the disinvestment of 24,000,000 Equity Shares held by the Selling Shareholder in the Company, equivalent to 12% of the issued, subscribed and paid up Equity Share capital of the Company as part of the Net Offer, and 1,200,000 Equity Shares that will be reserved for Employee Reservation Portion, and (ii) to achieve the benefits of listing the Equity Shares on the Stock Exchanges. Further, the Company expects that listing of the Equity Shares will enhance visibility and brand image and provide liquidity to its shareholders, announced by Rajeev Mehrotra, Chairman and Managing Director – RITES Limited during a press conference in Mumbai.
In terms of Rule 19(2) (b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”), this is an Offer for at least 10% of the post-Offer paid-up Equity Share capital of the Company.
In accordance with Regulation 26(1) read with Regulation 43 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (“SEBI ICDR Regulations”), the Offer is being made through the Book Building Process wherein not more than 50% of the Net Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”) (“QIB Portion”). 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Offer Price. However, if the aggregate demand from Mutual Funds is less than 5% of the QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion will be added to the remaining QIB Portion for proportionate allocation to QIBs. Further, not less than 15% of the Net Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Offer shall be available for allocation and Allotment to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price.
Further, 1,200,000 Equity Shares have been reserved for allocation to Eligible Employees, subject to valid bids being received at or above the Offer Price. All Bidders shall mandatorily participate in the Offer through the Application Supported by Blocked Amount (“ASBA”) process by providing details of their respective bank account in which the Bid Amount will be blocked by the Self Certified Syndicate Banks (“SCSBs”). For details, see “Offer Procedure” on page 609 of the red herring prospectus dated June 4, 2018 read with the corrigendum dated June 11, 2018 (together, the “RHP” or “Red Herring Prospectus”)..
Elara Capital (India) Private Limited, IDBI Capital Markets & Securities Limited, IDFC Bank Limited and SBI Capital Markets Limited are the Book Running Lead Managers to the Offer (“BRLMs”) and the Registrar to the Offer is Link Intime India Private Limited.
The Equity Shares of the Company are proposed to be listed on BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”). For the purposes of the Offer, the Designated Stock Exchange shall be NSE.
About RITES Limited: RITES Limited (the “Company” or “RITES”) is a wholly owned Government Company, a Miniratna (Category – I) Schedule ‘A’ Public Sector Enterprise and a leading player in the transport consultancy and engineering sector in India and the only company having diversified services and geographical reach in this field under one roof (Source: IRR Report). Based on Public Enterprise Survey 2015-2016, the Company is ranked no. 1 based on net profit and dividend declared in Industrial Development and Technical Consultancy Services sector (Source: IRR Report). Company has an experience spanning 44 years and has undertaken projects in over 55 countries including Asia, Africa, Latin America, South America and Middle East regions. RITES Limited is the only export arm of Indian Railways for providing rolling stock overseas (other than Thailand, Malaysia and Indonesia). The Company is a multidisciplinary engineering and consultancy organization providing diversified and comprehensive array of services from concept to commissioning in all facets of transport infrastructure and related technologies.
Since its inception in 1974, the Company has evolved from providing transport infrastructure consultancy and quality assurance services and has developed expertise in:
• Design, engineering and consultancy services in transport infrastructure sector with focus on railways, urban transport, roads and highways, ports, inland waterways, airports and ropeways;
• Leasing, export, maintenance and rehabilitation of locomotives and rolling stock;
• Undertaking turnkey projects on engineering, procurement and construction basis for railway line, track doubling, 3rd line, railway electrification, up gradation works for railway transport systems and workshops, railway stations, and construction of institutional/ residential/ commercial buildings, both with or without equity participation; and
• Wagon manufacturing, renewable energy generation and power procurement for Indian Railways through collaborations by way of joint venture arrangements, subsidiaries or consortium arrangements:
RITES has significant presence as a transport infrastructure consultancy organization in the railway sector. However, the Company also provides consultancy services across other infrastructure and energy market sectors including urban transport, roads and highways, ports, inland waterways, airports, institutional buildings, ropeways, power procurement and renewable energy. Over the years, the Company has served various public sector undertakings, government agencies and instrumentalities and large private sector corporations, both in India and abroad.
Link to the RHP: http://www.idbicapital.com/pdf/RITES%20Limited%20-%20RHP.PDF