New Delhi: Finance Ministry has collected ₹729.44 crore from divestment of 10% stake, or 2.5 crore equity shares, in its railway engineering consultancy company RITES Ltd through the Offer-For-Sale (OFS) route.
“Government undertook offer for sale for 10% of paid-up equity in RITES on 22-25 November 2019. The base offer was fully subscribed (100.01%) with disinvestment proceeds of ₹729.44 crore," secretary of department of investment and public asset management (DIPAM) said on the micro-blogging and social networking website Twitter on Tuesday.
Shares of the company have slumped nearly 8% in past three sessions on the government’s decision to divest its stake in the company. The stock fell a marginal 0.25% to ₹282.15 on the BSE today.
The government had proposed selling 10% stake in the company on 22 November to non-retail investors only and on 25 November to retail investors and non-retail investors, with an option to additionally sell up to 1.25 crore equity shares, representing 5% stake, through the offer-for-sale route.
The floor price for the OFS was set at ₹293.50 per share. Retail investors were to be allocated shares at a discount of 5% to the cut-off price.
As on 30 September, the government owned 87.4% stake in RITES, the only export arm of Indian railways for providing rolling stock overseas.
Proceeds from the transaction will take the government closer to its divestment target of ₹1.05 trillion for the current financial year, higher than the target of ₹90,000 in 2018-19.
Last week, the Cabinet had approved the privatisation of Bharat Petroleum Corporation Ltd (BPCL). The government will sell its entire 53.29% stake in the company to a strategic buyer along with transferring management control. The sale will not include Numaligarh Refinery Ltd in Assam. The refinery will become a separate entity to be later hived off to another public-sector firm.
The Cabinet had also announced selling its 30.8% shareholding in Container Corporation of India Ltd (Concor) to a strategic buyer along with handing over the management control. The government currently holds 54.8% in the company. The Centre will also dilute its 63.75% stake in Shipping Corporation of India Ltd.