Government to sell 5.36% stake in RVNL through OFS; shares plunge

RVNL share price NSE: Rail Vikas Nigam Ltd (RVNL) shares were under pressure on Thursday, a day after the government announced its decision to divest a 5.36 per cent stake in the PSU through an offer for sale (OFS) for Rs 1,329.9 crore. The RVNL stock fell as much as nearly 7 per cent to Rs 125 apiece on NSE. RVNL shares finished down 6.85 per cent at Rs 125.05 apiece on NSE.

"Offer for Sale in RVNL opens tomorrow for non-retail investors. Retail investors can bid on Friday. The government will divest 5.36 equity including a Green Shoe option of 1.96 per cent," Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey in a tweet on Wednesday.  

The proposed OFS comprises a base offer size of up to 70,890,683 equity shares of RVNL, representing 3.4 per cent of the company's equity, with an option to additionally sell 40,866,394 equity shares (1.96 per cent), according to a regulatory filing. In all, 11.17 crore shares will be offered, which would garner Rs 1,329.9 crore at the floor price of Rs 119 per share.

The offer is being undertaken by the government to meet minimum public shareholding norms. Capital market regulator Securities and Exchange Board of India (Sebi) stipulates entities listed entities to maintain a minimum public shareholding of 25 per cent. In 2021 the government had diluted a 15 per cent stake in RVNL through OFS.

RVNL share price history

RVNL's stock has given a positive return of over 300 per cent in the last 12 months, sharply outperforming a nearly 19 per cent gain in the benchmark Nifty index.

About RVNL 

Rail Vikas Nigam was incorporated in January 2003 as a 100 per cent owned PSU of the Ministry of Railways with the main objective of raising extra-budgetary resources and implementation of projects relating to the creation and augmentation of capacity of rail infrastructure on a fast-track basis.

(With inputs from agencies)

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