Govt's share sale in RVNL over-subscribed, institutional buyers put in Rs 1,900 crores worth bids

The government’s 5.36 per cent share sale in Rail Vikas Nigam Ltd (RVNL) was oversubscribed on the first day of issue with institutional buyers putting in bids worth about Rs 1,900 crore. In the two-day Offer-for-Sale (OFS), the government is selling 11.17 crore shares, representing a 5.36 per cent stake at a floor price of Rs 119 apiece. The offer includes a greenshoe option of an additional 4.08 crore RVNL shares or a 1.96 per cent stake.

On the first day of the share sale, institutional buyers put in bids for 15.64 crore shares, as against the base issue size of 6.38 crore. At an indicative price of Rs 121.17 apiece, the bids are worth close to Rs 1,900 crore. Shares of RVNL closed at Rs 125.25, down 6.77 per cent over the previous close of the BSE. The government currently holds a 78.20 per cent stake in RVNL.

RVNL was incorporated in January 2003, as a 100 per cent owned public sector unit of the Ministry of Railways with the objective of raising extra-budgetary resources and implementation of projects relating to the creation and augmentation of capacity of rail infrastructure on a fast-track basis. So far in the current fiscal, the government has raised Rs 4,235 crore, including Rs 4,185 crore from share sales in Coal India. The full-year budget target from disinvestment is Rs 51,000 crore.