Govt Proposes To Sell More Than 5% Stake In RVNL Via Offer For Sale, Check Out Floor Price

The floor price for the RVNL OFS has been set at Rs 119 per equity share, an approximate 11 per cent discount from RVNL's current market price.

On July 26, the RNVL stocks closed 3.87 per cent higher at Rs 134.35 per share on the BSE.

Source : Getty

The Finance Ministry has proposed to divest 5.36 per cent stake in Rail Vikas Nigam Limited (RVNL), a railway public sector enterprise. The two-day offer for sale (OFS) will start on July 27, as per the government's announcement on Wednesday. The floor price for the RVNL OFS has been set at Rs 119 per equity share, an approximate 11 per cent discount from RVNL's current market price.

On July 26, the RNVL stocks closed 3.87 per cent higher at Rs 134.35 per share on the BSE.

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

Offer for sale in RVNL opens tomorrow for non-retail investors. Retail investors can bid on Friday. Government will divest 5.36% equity including a Green Shoe option of 1.96%. pic.twitter.com/gUQU6aKxY7

— Secretary, DIPAM (@SecyDIPAM) July 26, 2023

As per RVNL's latest exchange filing, investors will have the opportunity to participate in the OFS on July 27 and July 28, with non-retail investors getting the first chance followed by retail investors.

As per the filing, the OFS plan also includes a green shoe option of 1.96 per cent in case of oversubscription.

Offer for Sale (OFS) is a simple method through which promoters in public companies can transparently sell their shares and reduce their holdings using the bidding platform provided by the exchanges.

Rail Vikas Nigam Limited (RVNL), a central public sector enterprise (CPSE) under the Ministry of Railways, was incorporated in the year 2003 with the twin objectives of "implementation of projects relating to creation and augmentation of the capacity of rail infrastructure on a
fast track basis and raising of extra-budgetary resources." 

According to CNBC, as of the June quarter of FY24, the government held a 78.2 per cent stake in RVNL.