By Sachin Murdeshwar

Mumbai : RITES Limited (“Company”), 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.

 

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.