The share price of RITES fell 5.7 percent intraday on February 27, the day the state-owned engineering services company’s offer for sale opened for subscription.
The government plans to sell a 10 percent stake through the two-day sale.
The stock, which has rallied more than 75 percent in the last one year, was quoting at Rs 301.50, down Rs 16.55, or 5.20 percent, on the BSE at 1116 hours.
The government of India, through the ministry of railways, proposed to sell up to 1.25 crore equity shares (representing 5 percent of total paid-up equity), with an option to additionally sell up to the same number of shares, which is an oversubscription option, the company said in a BSE filing a day earlier.
In the event the oversubscription option is exercised, the equity shares forming part of the base-offer size and the oversubscription option will in the aggregate, be referred to as the offer shares, it added.
The offer for sale issue opened for non-retail investors on February 27 and will remain open for retail and non-retail investors the next day.
The offer takes place on a separate window of the stock exchanges on the T day (February 27) and T+1 day (February 28), from 9.15 am till 3.30 pm (Indian Standard Time) on both days, the company said.
"Non-retail investors who have placed their bids on T Day, may indicate their willingness to carry forward their un-allotted bids to T+1 day for allocation to them in the unsubscribed portion of retail category," it added.
But retail investors would be allowed to place and revise their bids only on T+1 day, the company said, adding the floor price for the offer was Rs 298 per share.
The offer for sale will fetch the government around Rs 750 crore. It is a part of the government's divestment programme target, which was reduced to Rs 65,000 crore from Rs 1.05 crore set at the beginning of FY20.The government, so far, has raised around Rs 18,000 crore through stake sale in PSUs.