Government to launch RVNL OFS on July 27 for divesting 5.36% stake

27 Jul 2023 , 10:11 AM

According to the government, the Finance Ministry has agreed to sell a 5.36% share in the railway public sector firm Rail Vikas Nigam Limited (RVNL), for which the offer for sale (OFS) commences on July 27.

The RVNL OFS would have a floor price of Rs 119 per equity share. This represents an approximately 11% discount to RVNL’s current market price. On the BSE, the stock closed 3.87% higher at Rs 134.35 a share on July 26.

“Non-retail investors can buy RVNL shares from today. While, retail investors will be able to bid on Friday. The government plans to sell 5.36% of its equity stake, along with a green shoe option of 1.96%,’ said Tuhin Kanta Pandey, secretary of the Department of Investment and Public Asset Management (DIPAM).

The idea is to sell 11.17 crore shares, representing a 5.36% holding in the rail PSU. According to a regulatory filing, this will include a green shoe option of 1.96% in the event of oversubscription.

An OFS is a simplified technique by which promoters in public companies can offload their shares to reduce their shareholding in a transparent manner via the bidding platform of exchanges.

RVNL serves as the Ministry of Railways’ construction arm for project implementation and transportation infrastructure development.

At around 10.05 AM, RVNL was trading 3.65% lower at Rs 129.35, against the previous close of Rs 134.25 on NSE. The counter touched an intraday low of Rs 125.80.

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