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Wednesday, April 02, 2008

RITES files DRHP with SEBI

RITES, a Mini Ratna Grade I multi-disciplinary public sector enterprise under the Ministry of Railways, operating in the fields of transport, infrastructure and related technologies, has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to enter the capital market soon with an initial public offering (IPO) of 140,00,000 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process.

The issue comprises a fresh issue of up to 1,00,00,000 equity shares and an offer for sale of up to 40,00,000 equity shares by the President of India acting through the Ministry of Railways, Government of India (the selling shareholder). The issue comprises a net issue to the public of up to 126,00,000 equity shares and a reservation of up to 14,00,000 equity shares for subscription by eligible employees.

The issue will constitute 28% of the fully diluted post issue capital of the company. The equity shares are proposed to be listed on National Stock Exchange of India and Bombay Stock Exchange.

Of the total Issue, up to 50% of the net issue will be allocated on a proportionate basis to qualified institutional buyers. Also, 5% of the QIB portion will be available for allocation on a proportionate basis to Mutual Funds only. Further, at least 15% of the net issue will be available for allocation on a proportionate basis to non-institutional bidders and at least 35% of the net issue will be available for allocation on a proportionate basis to retail individual bidders.

The book running lead managers to the Issue are Kotak Mahindra Capital Company Limited, Enam Securities Private Limited and ICICI Securities Limited.

At present, RITES is involved in the concessioning projects in Tanzania and Mozambique where it is engaged in the rehabilitation, operation and maintenance of the railway network for 25 years. RITES has 51 per cent and 26 per cent stakes in these concessioning projects respectively. The proceeds of the forthcoming IPO are proposed to be used among other things, for financing leasing of rolling stock and investment in BOT and BOOT projects in the infrastructure sector.


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