Should I apply for RITES IPO?

Recommendations from different agencies

Name Recommendation
Motilal Oswal
Angel Broking
Centrum Broking


GMP of Rited Limited

AS on 22 June : 40

As on 20 june: 32-35

As on 23 june: 36

Subscription Day 3:

Shares Offered 120,00,000 36,00,000 84,00,000 252,00,000
Number of times Subscribed 71.7126 194.5614 14.6844 66.8864


Rites Limited 

Government of India has announced to sale its 12% stake in RITES through IPO as per government’s disinvestment policy. Every investor might have question in mind- should I invest in RITES IPO or not?

This article will provide you all information about RITES Limited which is necessary before making decision of investment in RITES IPO.

Introduction of RITES Limited

RITES Ltd is a government of India entity which was established in 1974 under the regime of Indian Railways. Earlier known as Rail India technical and economic service (RITES) was initially started to provide consultancy services in rail transport infrastructure. RITES is an engineering consultancy company which provide aid to transport management to operators in the country and abroad also.

Shining Points about RITES Ltd

  • RITES Ltd has executed projects in more than 60 countries on major continent.
  • RITES Ltd has not only limited its working area in rail transport but also provides planning and consultancy services for infrastructure like airports, ports, highways and even for urban planning.
  • RITES Ltd has been awarded the status of MINIRATNA in 2002.
  • Rites Ltd is an ISO 9001:2008 company.

Let’s have a glance on name of some railway companies which had or have projects with RITES Ltd.

Name of Railway company Country Services of RITES in project
National Railways Of Zimbabwe Zimbabwe Investment plan
SNTF Algeria Consultancy services
Zambian Railways Zambia Project improvement
Launda Railways Angola Study and research of rehabilitation
Sri Lanka Railways Sri Lanka Management and consultancy assistance
Uzbek railways Uzbekistan Consultancy for elastic fasteners
Iran railways Iran Planning


Bangladesh railways Bangladesh Consultancy services
Ghana railway corporation Ghana Consultancy services
Botswana railways Botswana Management support
Red Atlantic railway network Colombia Equity partner and technical support
Tanzania railway corporation Tanzania General management
Cambodian railways Cambodia Rehabilitation services and guidence
Iraqi republic railway establishment Iraq Operation and maintenance of Baghdad – Al Qaim – Akashat  section
Sudan railways Sudan Consulting services
Nigerian railways Nigeria Revitalization , planning and management services
Kenya railways Kenya Locomotive operations and restructuring services
Beira railroad corporation Mozambique Rehabilitation and management services
Central East African railways Malawi Management services
Bangalore metro rail corporation Karnataka-India General consultancy services
Patna metro Bihar-India Detailed project report
Gorakhpur metro U.P.- India Detailed project report
Metro-link express for Gandhinagar and Ahmadabad (MEGA) Gujarat- India
Nagpur metro rail corporation ltd Maharashtra- India Consortium of general consultancy



The key strengths of RITES Limited

  • A wholly owned Government company
  • A MINIRATNA (Category – I) Schedule ‘A’ public sector enterprise
  • Experience span of 43 years
  • Only export arm of Indian railways for providing rolling stock overseas
  • Strong and consistent financial performance
  • Strong and active system for internal control and management
  • Preferred consultancy service provider for government projects
  • Experienced management personnel
  • Technically qualified team
  • Vast order book with strong and diversified clients

Future planning of RITES Limited

  • To build competency in transport infrastructure sector
  • To expand company’s international operations
  • To expand operations in power procurement and renewable energy sector through subsidiary

Financial performance of RITES LIMITED

Figures are in INR Crore

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 ( Up to end of the third quarter)
Total revenue 1083.1 1223.5 1159.1 1226.7 1563.7 1061.1
Total expenses 753.5 835.8 691.8 773.5 1044.7 669.5
Profit after tax 238.1 258.8 314.0 280.0 353.3 239.0
Net margin (%) 22.0 21.2 27.1 22.8 22.6 22.5


We have studied about RITES’s working area, clients, future goals and financial performance over some past years.

Now, let me provide some insights about RITES IPO

Promoters of RITES Limited: The President of India

Subscription Date: 20-22 June 2018

Price Band: INR 180-185 per share

Retail Discount: INR 6 per share

Offer for Sale: 25,200,000 shares

Minimum bid/ Lot size: 80 shares (minimum investment is INR 14,800 only on higher price band)

Face value: INR 10 per share

Premium: INR 175 per share

Listing on: BSE and NSE

Rites Limited Contact Details

Rites Limited 
RITES Bhavan No. 1
Sector 29
Gurugram– 122001

Phone: +91 124 2571665
Fax: +91 124 2571187
Email: [email protected]

Registrar of Rites Limited IPO

Link Intime India Private Limited
C-101, 1st Floor, 247 Park
Lal Bahadur Shastri Marg, Vikhroli (West)
Mumbai – 400 083

Phone: +91 22 4918 6200
Fax: +91 22 4918 6195
Email: [email protected]

Valuation of Rites Limited (Based on latest FY)

Earnings Per Share (EPS): INR17.64

Price/Earnings (P/E) ratio: 10.20 – 10.48

Return on Net Worth (RONW): 17.28%

Net Asset Value (NAV): INR102.06 per share

Listing Performance of Rites Limited

IPO Opening Date: 20 June 2018

IPO Closing Date: 22 June 2018

Finalisation of Basis of Allotment: 27 June 2018

Initiation of refunds: 28 June 2018

Transfer of shares to demat accounts: 29 June 2018

Listing Date: 2 July 2018

Why Should I invest in RITES IPO?

  • Average revenue growth of 9% CAGR in the last 5 years
  • Average more than 20% profit in last 5 years
  • RITES Ltd has consistently been paying dividend of 30%
  • RITES is MINIRATNA Company
  • IPO has attractive valuation

Risk factors of RITES IPO

  • Major client s of RITES Ltd are Indian Railways and central/state governments and other public sector companies. RITES Ltd gets contracts on nomination basis and there is no assurance that in future the company will have contracts on nomination basis.
  • Change in government policy will affect the company very adversely .
  • RITES Lts is in process to wind up some subsidiaries like RISL, RITES (Africa) and RMAC (Saudi Arabia)
  • Due to heavy investment in vast operations, RITES Lts has negative cash flow in recent years and may continue for some in years in future due to continue projects/delayed projects.

Leave a Reply

Your email address will not be published. Required fields are marked *