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Railways consultancy firm RITES, the first state-owned firm to hit the IPO market in the current fiscal listed at Rs 190 on BSE and NSE, up 2.7% from its issue price of Rs 185 a share.

At 10:05 am, the stock was trading at Rs 203, up 6.55% and 9.43% with respect to open price and issue price respectively on BSE. On comparison the S&P BSE Sensex was trading 0.5% lower. The stock had hit a high and low of Rs 205.75 and Rs 190 respectively, till now.

Analysts, however, are not in favour of buying the IPO at the current price and suggest remaining cautious for new listings.

According to AK Prabhakar, head of research at IDBI Capital, "the market sentiment, currently is not in favor of buying the new IPOs. The increase in stock price is mainly due to over-subscription. A number of PSU listings have happened but they have not performed as well as they should have. Would advise investors to wait 1-2 months to buy th stock."

The Rs 466-crore initial public offer garnered strong investor demand, with the issue getting subscribed more than 67 times. The category set aside for qualified institutional buyers (QIBs) was subscribed 71.72 times, non-institutional investors 194.56 times and retail investors 15.74 times.

The price band for the issue was fixed at Rs 180-185 per share. The issue had consisted of offer for sale of 2.52 crore equity shares by the government.

RITES is a wholly owned government company, a Miniratna (Category – I) Schedule 'A' public sector enterprise. It is a leading player in the transport consultancy and engineering sector in India and the only company having diversified services and geographical reach in this field under one roof, as per IRR Report.

Elara Capital (India), IDBI Capital Markets & Securities, IDFC Bank and SBI Capital Markets were booking running lead managers to the issue.

Last modified on Monday, 02 July 2018

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