New Delhi, Feb 27 (SocialNews.XYZ) The Offer for Sale (OFS) of railway engineering consultancy firm RITES has been over-subscribed at 132 per cent on Thursday for the non-retail quota opened for subscription in which the government hopes to get around Rs 745 crore.
RITES informed the exchanges that government will exercise over-subscription option in OFS, to sell 39 lakh more shares. The floor price of Rs 298 a share offers a 6 per cent discount to the Wednesday's close price of Rs 318.
This sale is as part of the Finance Ministry's disinvestment plan.
"The government has informed about exercise of oversubscription option to the extent of 39,99,852 shares in addition to the base offer size," RITES said. In 2017-18, the RITES issue was oversubscribed 67 times when government divested 12.8 per cent stake.
Out of total 1,00,00,000 shares on offer for non-retail investors on Thursday, the issue has received applications for 1,31,99,881 shares.
The state-run company proposes to sell up to 1.25 crore equity shares, with a green-shoe option of a similar number of shares. It expects to raise a total of Rs 745 crore from the offer.
The issue opened on February 27 for non-retail investors and will open on February 28 for retail investors and for non-retail investors who choose to carry forward their un-allotted bids.
The company share price was down by 6 per cent on Thursday.
The company has reserved 25 lakh shares for retail investors with an option to double the offer size in case of oversubscription. Retail investors will be allocated offer shares at a discount of Rs 8 to the cut off price in accordance with the Sebi OFS circulars. Retail bids below the cut-off price shall not be eligible for allocation.
RITES said the offer for sale is undertaken to meet the minimum public shareholding criteria laid down by the market regulator.
Securities and Exchange Board of India (Sebi) mandates at least 25 per cent public shareholding within three years of listing. Currently the government, which is the promoter of the firm, owns 77.39 per cent in the company. If the company is able to complete the share sale successfully, including the greenshoe option, the stake of the government will come down by 10 per cent.
Source: IANS
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