Recommendation from different agencies
| Name | Recommendation |
|---|---|
| Motilal Oswal | |
| Angel Broking | |
| Kotak | |
| 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:
| QIB | NII | RII | Total | |
| 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]
Website: www.ritesltd.com
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]
Website: http://www.linkintime.co.in
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.