RVNL offer-for-sale: Issue subscribed 2.73 times by institutional investors

The institutional investors have subscribed 2.73 times to the government's issue of a 5.36% stake sale in public sector unit Rail Vikas Nigam Ltd, the infrastructure arm of the Ministry of Railways, as bids worth over ₹2,000 crore were put in by non-retail investors.

The Centre's overall offer-for-sale issue comprises the sale of 11.17 crore shares, representing a 5.36% stake at ₹119 apiece. The offer comprises a green shoe option of 4.08 crore shares, about a 1.96% stake.

"Offer for sale in RVNL received an enthusiastic response from non-retail investors today... Government has decided to exercise the green shoe option," Tuhin Kanta Pandey, Secretary, of Department of Investment and Public Asset Management (DIPAM) Secretary says.

Retail investors can bid today i.e. Friday.

The company says it will exercise the "Oversubscription Option" to the extent of 40,866,394 equity shares, representing 1.96% of the total paid-up equity share capital of the company, in addition to 70,890,683 equity shares of the company, representing 3.40% stake, forming part of the base offer size.

Accordingly, the “total offer size will be up to 111,757,077 equity shares (representing 5.36% stake), of which 1,175,708 equity shares will be available as part of the offer for the retail category on T+1 day, i.e., July 28, 2023”.

A minimum of 25% of the offer shares will be reserved for mutual funds and insurance companies. In the event of any under-subscription by mutual funds and insurance companies, the unsubscribed portion will be available to other bidders in the non-retail category.

The shares of RVNL fell 4.24% to ₹120.8 on the BSE on Friday. The multi-bagger stock has risen around 290.15% in the last 12 months, rebounding from its 52-week low of ₹29 touched on June 21, 2022. On the year-to-date (YTD) basis, the counter has gained nearly 76.15%.

The company's revenue for the March 2023 quarter stood at ₹5,721.25 crore, up from ₹5,010.67 crore in the December quarter, and ₹20,281.5 crore in the entire fiscal year 2022-23. The PSU's net profit saw a minimal increase to ₹345.27 crore in March 2023 quarter, up from ₹341.02 crore and ₹1,267.96 crore in the entire fiscal year.

In April, the Department of Public Enterprises granted the ‘Navratna’ status to the PSU. RVNL is the 13th Navratna firm amongst the Central Public Sector Enterprises (CPSEs). CPSEs are allowed to invest up to ₹1,000 crore without seeking approval from the government. On April 29, the company informed the exchanges that it secured two orders worth ₹3,278 crore, one from Madhya Pradesh Poorv Kshetra Vidyut Vitran and the other from Chennai Metro Rail Limited (CMRL).