RITES readies Rs 2.5 billion for IRSDC stake; IPO to boost railways infra. After buying 25% stake in IRSDC for ₹250 crore, RITES plans to appoint a nominee on the IRSDC board.
NEW DELHI: Public sector enterprise RITES Ltd will buy a 25% stake for ₹250 crore in Indian Railway Station Development Corp. Ltd, (IRSDC), the company tasked with redeveloping 600 railway stations across the country.
“The RITES board has approved buying 25% stake in IRSDC for ₹250 crore. The decision was taken in March. We are in the process of finalizing details and participation agreement after which agreements would be signed,” RITES chairman and managing director Rajeev Mehrotra said in an interview.
Mehrotra added that RITES plans to appoint a nominee on the IRSDC board. Although RITES doesn’t have plans to foray into station development, it can provide technical services needed for station and real-estate development.
IRSDC managing director S.K. Lohia confirmed the development and said the documents and plans requested by RITES are under preparation. He refused to comment further.
In 2016, IRSDC outsourced work on India’s first station re-development project at Habibganj in Madhya Pradesh capital Bhopal.
The work is likely to be completed by December this year.
IRSDC is a joint venture company between IRCON (a government undertaking under ministry of railways) and Rail Land Development Authority (RLDA) (a statutory authority under ministry of railways) with a stake of 51:49. However, in September, during IRSDC’s annual general meeting a decision was taken to sell 1% of Ircon’s stake to RLDA for about ₹40 lakh to make it a equal joint-venture.
A senior railway ministry official on condition of anonymity said, “Railways plans to restructure IRSDC where four entities RLDA, IRCON, RITES and CONCOR, all under Indian Railways would have 25% stake each in IRSDC.
The arrangement will help to provide more autonomy to IRSDC and get a capital of around Rs 1,000 crore to undertake station development.”
The Railway Board in 2017 entrusted the work of station re-development to IRSDC. It will redevelop 600 stations, out of which 50 will be taken up in first phase.