Upcoming Government Stake Sale: 5.36% Stake in RVNL to be Offered for Sale Starting July 27
The Indian government has set an ambitious disinvestment target of Rs 51,000 crore for the financial year 2023-24.
As part of its disinvestment plans, the Finance Ministry has decided to divest a 5.36% stake in the public sector company Rail Vikas Nigam Limited (RVNL)
The Offer for Sale (OFS) for this stake will open on June 27. The floor price set for the offer is Rs 119 per equity share, representing an 11% discount to the current market price of the company.
As of July 26, RVNL shares closed at Rs 134.35 on the Bombay Stock Exchange, marking a 3.87% increase.
The OFS will be available to both non-retail and retail investors, with the former getting access to it on July 27 and the latter on July 28.
Tuhin Kanta Pandey, Secretary of the Department of Disinvestment and Public Asset Management (DIPAM), confirmed this information through a tweet.
The government intends to sell its 5.36% stake in RVNL, with an additional green shoe option of 1.96% in case of oversubscription.
Earlier, on July 11, financial news outlet Moneycontrol reported the government’s preparation for an offer for sale of RVNL.
According to regulatory filings, approximately 11.17 crore shares will be up for sale, constituting 5.36% of the stake in this railway public sector undertaking (PSU).
In the event of oversubscription, the green shoe option of 1.96% will be exercised, allowing investors an opportunity to purchase additional shares.
Rail Vikas Nigam Limited (RVNL) serves as the construction arm of the Ministry of Railways in India. The company plays a crucial role in executing various railway projects and also contributes to the development of transport infrastructure.
Recently, RVNL secured a substantial contract worth Rs 808 crore from the National Highways Authority of India (NHAI).
Under this contract, RVNL will be responsible for widening the Chandikhol-Paradip section of National Highway 53 in the state of Odisha, transforming it from a 4-lane road to an 8-lane highway.
The decision to divest a stake in RVNL aligns with the government’s efforts to unlock the value of state-owned enterprises and raise funds for various developmental initiatives.
By selling a portion of its holding in RVNL, the government aims to attract investment from the private sector and provide an opportunity for retail investors to participate in the country’s economic growth.
The move to raise funds through strategic disinvestment is not new, as it has been a key aspect of the government’s fiscal policies in recent years.
The proceeds from disinvestment activities contribute to the exchequer, aiding in managing the fiscal deficit and funding various social welfare programs and infrastructure projects.
In conclusion, the government’s decision to divest a 5.36% stake in RVNL through the Offer for Sale (OFS) is expected to attract investor interest and unlock the company’s value.
As an integral part of India’s railway infrastructure development, RVNL’s projects hold significance in the nation’s journey toward progress and economic growth.
With the OFS opening on July 27, investors from both the retail and non-retail sectors will have an opportunity to participate in the growth story of RVNL and contribute to the overall development of the country.
The successful execution of this disinvestment initiative will bolster the government’s efforts to achieve its ambitious disinvestment target of Rs 51,000 crore for the financial year 2023-24 and pave the way for further economic transformation and prosperity.
