Government divested 12.6% stake in RITES via initial public offer.

The government intends to sell a further 15 per cent stake in its railways undertaking RITES India under the Offer-For-Sale (OFS) route, according to an official announcement on Wednesday,

The stake sale would augment the government's stake sell-off kitty for the current fiscal by Rs 700-Rs 750 crore at the prevailing price of RITES shares.

"The GOI (Government of India) intends to disinvest 15 per cent paid up equity capital of RITES Ltd out of its shareholding of 87.40 per cent, through "Offer for Sale of shares by promoters through the stock exchanges as per Securities and Exchange Board of India (SEBI) Rules and Regulations", the Department of Investment and Public Asset Management (DIPAM) announcement said.

In 2017-18, the Centre came out with the RITES initial public offer (IPO) by which it divested 12.60 per cent of its stake, which currently stands at 87.40 per cent.

Official sources said that the OFS could take place in July. DIPAM has already issued RFP for appointment of merchant bankers and selling brokers for the OFS.

At the current share price of Rs 230, the RITES issue may fetch Rs 700-Rs 750 crore for the government. RITES was listed at Rs 190 per share against the issue price of Rs 185.

During the current financial year so far, Rs 2,350.25 crore have been garnered through divestments against the annual target of Rs 90,000 crore on this count.

This year, the DIPAM has completed disinvestment in another railway subsidiary -- RVNL. RVNL's IPO was the first such issue in the current fiscal which fetched the government Rs 480 crore by divesting 12.12 per cent stake in RVNL.

According to sources, government is also looking at offering shares at a discount to eligible employees of RITES. The extent of discount would be decided in due course.