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The union government’s plan of listing government railway entities has got another boost as capital market regulator SEBI has given green signal to the IPO of IRCON International. The PSU (public sector undertaking) filed its IPO prospectus in March to sell 9,905,157 shares. An unnamed official told the Press Trust of India (PTI) that IRCON IPO will mobilize around INR500 crore (INR5 billion) for the government.
“SEBI gave its nod for IRCON IPO on July 13,” said the official, adding that the offer is likely to be launched in September. Through the President of India, the government holds 100% equity in the company and plans to dilute 10.53% stake.
IRCON is an integrated engineering and construction company specializing in major infrastructure projects, including railways, highways, bridges, flyovers tunnels, aircraft maintenance hangars, runways EHV substations, electrical and mechanical works. Headquartered in Saket, New Delhi, the company has 26 project offices and five regional offices in India and five overseas project offices in Sri Lanka, Bangladesh, Malaysia, South Africa and Algeria.
IRCON IPO: Following footsteps of RITES
IRCON is one of the several Indian railways companies the then finance minister Arun Jaitley identified for stock market listing in February 2017. Under the plan, the government has already listed RITES Limited last month. Another PSU, Rail Vikas Nigam Limited (RVNL), has received SEBI approval for launching the IPO. Like RITES, RVNL is a specialized player operating into high speed rail infrastructure.
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Apart from IRCON IPO, the Finance Ministry is also preparing for share sale in IRFC (Indian Railway Finance Corporation) and draft prospectus in this regard is likely to be filed soon.
Divestment not limited to railways
While the government is clearly aggressive in divestment of railways entities, its plans are not limited to the sector. The government listed Mishra Dhatu Nigam, Hindustan Aeronautics and Bharat Dynamics earlier this year. Similarly, it has filed draft papers with SEBI for Indian Renewable Energy Development Agency (IREDA), Mazagon Dock Shipbuilders and Garden Reach Shipbuilders & Engineers. Check the full list of companies with IPO pares filed here.