RITES, a state-owned transport consultancy, and engineering services company, has set a price band of Rs 180 to Rs 185 per share for its initial public offering (IPO). The offer will open on June 20 and close on June 22. Investors can apply for a minimum of 80 shares and multiples of 80 thereof.
The company plans to offer 2.52 crore shares for subscription through the IPO, which at the upper price band indicates an issue size of Rs 466 crore.
The 100% offer-for-sale constitutes 12.60% of the post-offer paid-up capital of the company and will see the stake of government of India decline from 100% to 87.40% post the offer. The IPO is a part of the government’s disinvestment programme and all the proceeds from the offer will go the government. RITES has a significant presence as a transport infrastructure consultancy organisation in the railways.
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.
The company’s revenue from operations on a consolidated basis for the financial year FY 2015, 2016, 2017 and the nine months ended December 31, 2017, amounted to Rs 1, 012 crores, Rs 1, 090 crores, `1353 crore and `936 crore respectively. The company’s profit after tax was Rs 312 crore, Rs 282 crore, Rs 361 crore and Rs 252 crore respectively for the same periods.
The company’s revenue from operations has increased at a compounded annual growth rate (CAGR) of 15.60% from Rs 1,012 crore in the FY 2015 to Rs 1353 crore in FY 2017. The profit after tax (PAT) has increased at a CAGR of 7.63% from Rs 312 crore in FY2015 to Rs 361 crore in FY 2017. On a standalone basis, the company has an order book of Rs 4,818 crore as on March 31, 2018.
RITES joins a long list of companies who have raised funds from the market in the recent past. In 2017, 36 companies raised `67,147 crore through IPOs. Listing gains and the positive sentiment in the market are among the reasons attributed to the trend.