Shares of Rail Vikas Nigam Limited (RVNL) pplunged 9 per cent to Rs 27.80 on the BSE in the intra-day trade on Wednesday as the government’s two days stake sale through offer for sale (OFS) began today. The floor price has been fixed at Rs 27.50 a share, a 9.54 per cent discount to Tuesday’s closing price of Rs 30.40 apiece on the BSE.
The government on Tuesday said it will dilute 15 per cent stake in Rail Vikas Nigam Ltd via an offer for sale to raise nearly Rs 750 crore. The issue opened on Wednesday for non-retail investors and will open on Thursday for retail investors.
“Total 208.5 million equity shares or 10 per cent of the total paid-up equity capital of the company is being offered in the OFS. The government may choose to sell an additional 104.25 million equity shares or 5 per cent of the total equity capital of the company over and above the offer,” RVNL said in an exchange filing.
The company, a wholly-owned government company, is a project executing agency working for and on behalf of the Ministry of Railways. It was incorporated with an objective to undertake rail project development mobilization of financial resources and implementation of rail projects pertaining to strengthening of golden quadrilateral and port connectivity and raising of extra- budgetary resources for project execution.
The company is in the business of executing all types of railway projects including new lines doubling gauge conversion railway electrification metro projects workshops major bridges construction of cable stayed bridges institution buildings etc.
As of December 31, 2020, the government held 87.84 per cent stake in RVNL. Retail or individual shareholders held 9.09 per cent stake, followed by mutual funds (1.1 per cent) and foreign portfolio investors (0.31 per cent).