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RITES, Fine Organics gain on stock market debut after successful IPOs
Photo Credit: Manni Das/VCCircle

State-run railways consultant RITES Ltd and specialty chemicals maker Fine Organic Industries Ltd made a positive start on the stock exchanges on Monday, with shares of both companies listing at a premium.

Shares of RITES began trading on the BSE at Rs 190 apiece compared with the initial public offering (IPO) price of Rs 185, stock-exchange data showed.

The stock touched a high of Rs 224.40 before closing at Rs 212.70, up 15%. The company now commands a market capitalisation of Rs 4,254 crore compared with the Rs 3,700 crore valuation it had sought through the IPO.

The RITES IPO had received a strong response from investors and was subscribed 67 times.

The BSE’s benchmark Sensex closed 0.45% lower on Monday.

Shares of Fine Organics began trading on the BSE at Rs 815, up from the IPO price of Rs 783 apiece. The shares touched a high of Rs 834 before closing the day at Rs 822.80 apiece, a gain of 5%.

The company now commands a market capitalisation of Rs 2,552.70 crore against a valuation of Rs 2,400 crore it had targeted through the IPO.

Fine Organics’ public issue had also drawn strong investor response and was covered 8.8 times.

The listing of RITES and Fine Organics takes the total number of new companies on the main board this year to 16. Eight of the previous 14 companies had gained on debut.

RITES

The public issue of RITES was part of the government’s disinvestment target for the current financial year. The Rs 466.20 crore IPO resulted in a 12.6% stake dilution by the government. It has three years to bring its stake to 75% or below.

VCCircle had, in June last year, reported that the government had hired merchant bankers for various state-owned companies including RITES. Elara Capital, IDBI Capital Markets, IDFC Bank and SBI Capital Markets managed the RITES IPO.

VCCircle had previously reported that the government was the biggest beneficiary from the IPO boom in 2017. The government took four state-run companies public. In all, the government raised about Rs 21,118 crore, besides selling stakes in listed firms.

RITES was incorporated in 1974 under the Ministry of Railways. The company provides infrastructure consultancy not just for the railways but also for urban transport, roads and highways, ports, inland waterways, airports, institutional buildings, ropeways, power procurement and renewable energy sectors.

The company is also into wagon manufacturing, renewable energy generation and power procurement for Indian Railways through collaborations by way of joint ventures or subsidiaries.

The company has been operating for 43 years and has undertaken projects in over 55 countries in Asia, Africa, Latin America, South America and West Asia.

Fine Organics

The company joined about four dozen listed peers, including Blackstone-backed SH Kelkar & Co. Ltd, BASF India and Shree Pushkar Chemicals & Fertilisers on the stock exchanges.

The speciality chemicals maker raised as much as Rs 600 crore. The issue was entirely a secondary market sale and resulted in a post-issue stake dilution of 25%, making it compliant with the minimum public float norms of the Securities and Exchange Board of India.

Fine Organics, which makes ingredients for the petrochemicals and food industry, had filed its IPO proposal on 8 February. It received SEBI approval last month. JM Financial and Edelweiss Financial Services managed the IPO.

The Fine Organics group was established in 1970 by Ramesh Shah and Prakash Kamat. The company was incorporated in 2005 and started operations a year later by setting up a manufacturing facility in Mumbai.

Fine Organics is the largest manufacturer of oleochemical-based additives in India and a strong player globally in the industry. It makes a wide range of speciality plant derived oleochemicals-based additives that are used in industries such as food, plastic, cosmetics, paint, ink, and coatings, besides other specialty applications.

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