RITES rose 1.49% to Rs 289.80 after the company said its board approved an investment of Rs 48 crore for acquiring a 24% stake in Indian Railways Station Development Corporation (IRSDC).
This investment is being done at face value of Rs 10 per share and will provide RITES an opportunity of growth in the emerging field of development of railway stations, RITES said in a statement on Friday, 27 December 2019.
IRSDC is a company promoted by Rail Land Development Authority (RLDA) and IRCON International to take up the railway station development work on pan India basis. In initial phase of development, 60 railway stations have been identified along with associated land monetisation to be taken up by IRSDC on EPC, PPP or selfdevelopment mode.
After this infusion of equity by RITES, the shareholding in IRSDC will be between RLDA, IRCON and RITES in the ratio 50:26:24 respectively for an enhanced capital value of Rs 200 crore.
In a separate announcement made after market hours on Friday, RITES declared an interim dividend of Rs 6 per share. The record date for the purpose of payment of dividend is 10 January 2020.
Standalone revenue of the company for the first half of FY20 has been 1423 crore and profit after tax has been Rs 325 crore. For the FY20 so far, the company's dividend payout ratio stands at 46% (on 6 month PAT).
In FY19, the company generated standalone profit after tax of Rs 445 crore and declared dividend of Rs 255 crore.
RITES is a public sector enterprise (PSE) and a leading player in the transport consultancy and engineering sector in India, having diversified services and geographical reach. The government's stake in RITES stood at 87.4% as on 30 September 2019.
RITES reported a 116.1% jump in consolidated net profit to Rs 232.58 crore on 68.5% rise in net sales to Rs 746.24 crore in Q2 September 2019 over Q2 September 2018.
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