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RITES IPO to boost Rly infra

| | New Delhi | in Sunday Pioneer

Looking forward to give a major fillip to the railway infrastructure development, the Centre is all set to divest 12 per cent stake through IPO (Initial Public Offer) in the RITES, a PSU of the Railway Ministry. After the divestment, the Government will hold about 87.4 per cent, as another 0.6 per cent will be given to the RITES (Rail India Technical and Economic Services Ltd) employees.

While IPOs existed in the State-owned sectors like Oil, Energy and Power, the IPO being planned by RITES will be the first by the Indian Railways which so far has been looking for investors from other resources including the insurance companies. Railways anticipates that the listing of the stakes will help projects like freight corridors, high speed rail corridors, station development and upgradation of rail tracks to bear with the speed of 160 kmph.

“Listing will help wider participants of stakeholders and our performance will be reviewed by different market participants. The greatest advantage in the IPOs will be for the retail investors with small funding who can get associated with railways. More than the excitement, I am looking forward for a great success since RITES as a firm has its own credibility across the globe,” RITES Chairman and Managing Director Rajeev Mehrotra told The Pioneer.

RITES provides consultation in transportation, multimodal, city planning, railways, shipping, water management, designing, and operating stations, among other things. While the IPO is slated for third week of this month, the company is expected to list by the first week of July. The IPO is part of Government’s strategic disinvestment plan as the company has enough funds for its immediate capital expenditure.

Mehrotra is credited to boost the image of the RITES and its revenue from Rs 566 crore when he took over in 2007-08 to about Rs 1600 crore last fiscal. Besides launching the significant IPO now, Mehrotra, who comes from a power sector background, has been instrumental in exports of railways’ rolling stocks (locomotives, coaches, multiple units) to the sub-continent countries like Sri Lanka, Myanmar and couple of African countries.

Currently, RITES has undertaken the metro project in Mauritius other than being involved in some of the domestic metro projects like Pune, Nagpur and Ahmedabad.On a query on global competition from European firms, the United States, Japan, China and Korea, Mehrotra said RITES is at par with the global leaders as far as technical expertise is concerned. Mehrotra received three award for Export Excellence (Silver Shield) for three financial years in a row.

“We have an experience in doing business in 55 countries,” Mehrotra said.

RITES, which one amongst the 11 PSUs of national transporter, has a paid-up equity of Rs 200 crore, net worth of Rs 2,100 crore, and cash reserves of over Rs 1,400 crore, of which working capital requirement is about Rs 500 crore.

In Financial Year 2017, RITES posted a revenue of Rs 1,563 crore.

 
 
 
 
 

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