RVNL OFS gets good response on Day 1; govt to exercise green shoe option

The offer for sale (OFS) of Rail Vikas Nigam (RVNL), which kicked off on Thursday, received a strong response from non-retail users with 2.73 times subscription.

The government has set a floor price of Rs 119, which was at a 12% discount from Wednesday's price.

Under the proposed OFS, the government has decided to offload about 7.08 crore equity shares, representing 3.4% equity on Day 1, which is the T day.

The government has decided to exercise the green shoe option, where it will sell an additional 1.96% stake. Friday is the T+1 day, and retail investors will be allowed to place their bids.

Only non-retail investors placed their bids on Thursday. Those non-retail investors who have placed their bids on T day and have chosen to carry forward their unallotted bids to T+l day will be allowed to carry forward and also revise their bids on T+1 day as per the OFS guidelines.

For retail investors, the offer will continue to take place during trading hours on a separate window of the stock exchanges on T+l day.

About 10% of the offer is reserved for allocation to retail investors subject to the receipt of valid bids.

The allocation will be made at or above the floor price on a price priority basis at multiple clearing prices, except in the case of retail investors, who will have the option to bid at the cut-off price.

IDBI Capital Markets and Elara Securities are acting as the brokers for the offer.

Earlier during the day, shares of RVNL fell nearly 7% at Rs 125.05 on NSE. On a year-to-date basis, the stock has surged 89%, while it has rallied 317% in the last one year.