Rites, a wholly state-owned consultancy firm, will come out with an initial public offering (IPO) of 10 million fresh shares in the next 3-4 months to raise at least Rs 115 crore to finance projects.The government will divest 10% stake in the company by offering four million shares in the IPO.The cabinet committee on economic affairs (CCEA), which met today, gave its approval for the listing of Rites.The sale of 14 million shares will see 28% stake dilution by the government."About 1.4 million shares will be reserved for employeesin the IPO," Finance Minister P Chidambaram said after the CCEA meeting.Chidambaram said the book value of the shares is Rs 115. The offer price will be decided through the book building process. After the IPO, the paid-up capital of Rites will increase from Rs 4 crore to Rs 5 crore.Rites has forayed into the business of concession of existing railway lines, build-operate-transfer of rail and infrastructure projects and leasing of rail equipment.
