Rail Vikas Nigam Ltd. offer-for-sale over-subscribed, institutional buyers place bids worth ₹2,000 crore

The government’s 5.36% stake sale in Rail Vikas Nigam Ltd (RVNL) on Thursday got an enthusiastic response from institutional investors, who subscribed to the issue 2.73 times by putting in bids of over ₹2,000 crore.

In the two-day offer-for-sale (OFS), the government is selling 11.17 crore shares, representing a 5.36% stake at a floor price of ₹119 apiece. The offer includes a greenshoe option of an additional 4.08 crore shares or 1.96% stake in (RVNL).

“Offer for sale in RVNL received an enthusiastic response from non-retail investors today… Government has decided to exercise the green shoe option,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted.

The issue will open for retail investors on Friday.

On the first day of the share sale, institutional buyers put in bids for 17.44 crore shares against the base issue size of 6.38 crore. At an indicative price of ₹121.76 apiece, the bids are worth close to ₹2,100 crore.

Shares of RVNL closed at ₹125.25, down 6.77% over the previous close of the BSE.

The government currently holds a 78.20% stake in RVNL.

RVNL was incorporated in January 2003 as a 100% owned public sector unit of the Ministry of Railways, with the objective of raising extra-budgetary resources and implementing projects relating to the creation and augmentation of the capacity of rail infrastructure on a fast-track basis.

So far in the current fiscal, the government has raised ₹4,235 crore, including ₹4,185 crore from share sales in Coal India. The full-year budget target from disinvestment is ₹51,000 crore.