RVNL Share Price slumps 7% after the government declares 5.4% divestment via OFS

Tanushree Jaiswal 27th July 2023 - 05:00 pm

The central government of India has taken a significant step towards its financial objectives by commencing the sale of a portion of its ownership in Rail Vikas Nigam Ltd (RVNL) through an 'Offer for Sale (OFS).

The stake sale, scheduled for July 27 and July 28, 2023, involves the government selling 5.36% of its shares in the renowned railway infrastructure company. Additionally, there is an option to sell an extra 5.36% of total shares if there is enough demand from investors.

The shares are being offered at an attractive price of ₹119 each, which is 11% lower than the previous day's closing price. This appealing offer is open to both institutional and retail investors, with non-retail investors getting the opportunity to participate on July 27 and retail investors on July 28.

The government aims to raise around ₹1,330 crore through this strategic divestment in RVNL. The company has been actively involved in the development and enhancement of the nation's rail and transportation infrastructure and recently secured a ₹808-crore contract for the improvement of a crucial highway section in Odisha.

The news of the stake sale caused a temporary drop of 6.6% in RVNL's stock price during early trading on July 27. The stock opened at ₹129, which is 4% lower than the previous day's closing price, with the lowest point being ₹125.50. Market experts believe that this momentary dip presents a good buying opportunity for investors who have confidence in the company's long-term growth potential.

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Tanushree Jaiswal

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