The government’s disinvestment plan seems to be well on track, with FE learning that IRCON International, the infrastructure and engineering arm of the railways, is planning to file the DRHP for its proposed IPO very soon. “This will be a dilution of 10%, and the amount raised will be around R550 crore based on final valuation.We have not got into the details of the number of shares to be issued,” said a banker on condition of anonymity. The issue will hit the markets by the first quarter of the next financial year, the banker added. IRCON did not respond to an e-mail request from FE till late Monday.
IRCON International was incorporated in 1976 by the government of India. The company focuses on railway and highway construction, EHP sub-stations and mass rapid transit systems (MRTS). The company has so far completed 300 infrastructure projects in India and more than 100 projects overseas, across more than 21 countries, according to its website. IDBI Capital Markets, SBI Caps, and Axis Capital are the bankers to the issue.
The IPO of IRCON is part of the government’s disinvestment programme. The government in Union Budget 2017-18 announced the listing of shares of railway public sector enterprises (PSEs), IRCTC, IRFC and IRCON. For FY18 the government had set itself a disinvestment target of Rs 72,500 crore, but it has managed to raise near R1 lakh crore. Of this Rs 19,034 crore was raised through IPOs. HUDCO, CSL, GIC, and NIA were the PSU companies that got listed as part of government’s disinvestment process in FY18. For FY19, the government has set a disinvestment target of Rs 80,000 crore. Fundraising through IPOs had hit a record high in 2017, with 36 companies raising Rs 67,147 crore, data sourced from Prime Database revealed.