Bharat Dynamics, Indian Renewable Energy Development Agency get Sebi's nod to float initial public offerings

Two state-run majors Bharat Dynamics and Indian Renewable Energy Development Agency (IREDA) have received Sebi's nod to float initial public offerings.

Bharat Dynamics and IREDA had received ‘observations’ from the Securities and Exchange Board of India (Sebi) on February 15 and February 16, respectively, as per the latest update with the markets watchdog.

The observations are very important to any company for launching public issues like initial public offer (IPO), follow-on public offer (FPO) and rights issue.The two companies had filed draft papers with the markets regulator between January and December.

Going by the draft papers, Bharat Dynamics' IPO will see sale of equity shares by the government and the public issue will help the company achieve the benefits of listing. Bharat Dynamics was established in 1970 and is a manufacturer of guided missiles and allied defence equipment.

The company's net worth stood at Rs 2,212.46 crore at the end of March 2017. SBI Capital Markets, IDBI Capital Markets & Securities, and Yes Securities will manage the company's public issue.

IREDA's  IPO will see sale of 13.90 crore equity shares of the company. The public issue includes reservation of up to 6.95 lakh equity shares for eligible employees.

Proceeds from the issue will be used to augment the company’s capital base for meeting “future capital requirements and on-lending; and other general corporate purpose”.

"In addition, we believe that the listing of our equity shares will enhance our visibility and brand name among existing and potential customers,” IREDA said.

The listing of IREDA is expected to increase the paid-up share capital of the company from Rs 784 crore to Rs 923 crore. At present, the company has 78.46 crore equity shares. IREDA,  a public financial institution established in March 1987, is registered as a non-banking financial company with RBI. Since its inception, IREDA has played a pioneering role in supporting and facilitating the policies and programme of the Ministry of New and Renewable Energy.

Yes Securities (India), Elara Capital (India), IDBI Capital Markets and Securities and SBI Capital Markets will manage the company’s public issue.