Mumbai: Shares of Rail Vikas Nigam Ltd (RVNL) lost as much as 9% on Wednesday after the government proposed to sell up to 15% stake in the company through an offer for sale (OFS). Investor sentiment was also dented as the floor price for the offer has been fixed at ₹27.50 a share, a 9.54% discount to Tuesday's closing price on the BSE.
At 01:25 pm, Rail Vikas Nigam was at ₹27.7 down almost 9% from its previous close.
"A total 208.5 million equity shares or 10% 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% of the total equity capital of the company over and above the offer," according to exchange filings.
The 15% stake sale will garner ₹750 crore for the government. The issue opened on Wednesday for non-retail investors and will open on Thursday for retail investors.
RVNL was incorporated as a 100% PSU-owned company under the Ministry of Railways on January 2003 with the objectives of raising extra-budgetary resources and implementation of projects relating to creation and augmentation of capacity of rail infrastructure on fast track basis.
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% stake in RVNL and following the sale, its holding will fall to 74.67%.
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