ITI Ltd files FPO papers in bid to meet Sebi's 25% public shareholding norm

State-owned ITI Limited has filed draft papers with capital markets regulator Sebi to float a follow-on public offer (FPO), a move that will help the telecom PSU meet the minimum 25 per cent public shareholding norm.

The FPO comprises fresh issue of up to 180 million equity shares, according to the draft papers filed with Securities and Exchange Board of India (Sebi).

Besides, an additional issue constituting up to 5 per cent of the net issue will be reserved for employees, it added.

Proceeds of the issue will be used to fund working capital requirements, repayment of loans and general corporate purposes.

The FPO will help meet Sebi's requirement of minimum 25 per cent public shareholding.

BOB Capital Markets, Karvy Investor Services and PNB Investment Services will manage the company's FPO.

ITI is a public sector company under the department of telecommunications. It is a supplier for the defence communication and networking needs and a major supplier of encryption products to the Indian Army. The major customers are BSNL, MTNL, Defence, paramilitary forces and state governments.

The company has six manufacturing units at Bengaluru (Karnataka), Raebareli, Naini and Mankapur (all in Uttar Pradesh), Palakkad (Kerala) and Srinagar (Jammu and Kashmir).

At the end of June quarter, the government currently holds 93.72 per cent stake in ITI.

Earlier in March, the Cabinet had cleared selling of 180 million equity shares of ITI Ltd through a FPO.