Lalu's approval, railways IPO on trackLalu agreed on railways stake sell off.
10 Jun 2008
Railway Minister Lalu Prasad seems that he has agreed on a railways stake sell off. Railway PSU Rites is ready to hit the market with its IPO in few weeks in order to raise funds for expansion programme. The IPO would offer 25 per cent of the paid-up capital of the company. Plans are also to divest 10 per cent government equity in the company. To decide on the brand price of the IPO, a group of ministers are expected to meet this week.
The fund raised through the IPO
would be handled by Rites Railways consulting arm. Rites would pursue its
investment plans in overseas markets and participate in the domestic road
Last year, the government diluted its holding in PSU's by 20 per cent. This year, it has decided to increase it by 25 per cent. By doing this the government stake in the company would fall by 75 per cent. Plus, the stake would come down further as the government is likely to sell 10% equity in the company.
The IPO would follow a bonus share issue of Rs 36 crore this would be undertaken after a share split i.e. share valued at Rs 100 will split into 10 shares of Rs 10 each.