NEW DELHI :
Shares of RITES Ltd fell 5.2% to ₹301.65 apiece on the BSE on Thursday, the day sale of 5% 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 ₹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.
Government holds about 77% stake in RITES and with the 5% stake sale it would become compliant with Sebi’s minimum public shareholding requirement.
With the sale of the stake, the government will garner ₹3.72 billion. If the OFS is oversubscribed and the government does indeed sell another tranche, it will fetch it another ₹3.72 billion.
The government had set a divestment target of ₹1.05 trillion for the current fiscal out of which ₹348.5 billion have been collected so far.
Finance Minister Nirmala Sitharaman in the Union Budget for FY21 had set an ambitious ₹2.1 trillion goal for the sale of government holding in state-run companies.