RITES Ltd’s shares fell 5.2 per cent to Rs 301.65 apiece on the BSE, the day sale of 5 per cent of the company’s equity from the government’s stake began via offer for sale (OFS) route. The floor price for the stake sale has been set at Rs 298 per share. The government has proposed to sell up to 12.5 million equity shares over two days, 27 February for non-retail investors and 28 February for retail investors and for non-retail investors who choose to carry forward their un-allotted bids, according to a regulatory filing. The company has kept the option open to sell another 12.5 million equity shares if the issue is oversubscribed. The government holds about 77 per cent stake in RITES and with the 5 per cent stake sale, it would become compliant with SEBI’s minimum public shareholding requirement. With the sale of the stake, the government will garner Rs 3.72 billion. If the OFS is oversubscribed and the government does indeed sell another tranche, it will fetch it another Rs 3.72 billion.
The government had set a divestment target of Rs 1.05 trillion for the current fiscal out of which Rs 348.5 billion have been collected so far. Finance Minister Nirmala Sitharaman in the Union Budget for FY21 had set an ambitious Rs 2.1 trillion goal for the sale of government holding in state-run companies.
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