Government to Sell 5.36% of RVNL via OFS
A top government official said on Wednesday that the government will sell a 5.36% stake in state-run Rail Vikas Nigam Ltd (RVNL) through the offer-for-sale (OFS) route, with a green shoe option of 1.96%.
"The RVNL offer-for-sale opens tomorrow for non-retail investors." "Retail investors can bid on Friday," said Tuhin Kanta Pandey, secretary of the Department of Investment and Public Asset Management (DIPAM). The offer's floor price is set at Rs 119 per equity share, a discount to the BSE's closing price of Rs 134.35 on Wednesday. Even at the floor price, the sale of the 5.36% stake would net the government Rs 1,330 crore. The government currently owns 78.20% of the company.
According to an exchange filing, the promoter intends to sell up to 70,890,683 equity shares of the company to non-retail investors on Thursday, representing 3.40% of the total paid-up equity share. It also plans to sell 40,866,394 equity shares, representing a 1.96% stake, to retail investors and non-retail investors who choose to carry forward their unallotted bids. Following the OFS, RVNL will meet the market regulator Sebi's minimum 25% public shareholding requirement.
The government has budgeted Rs 51,000 crore in disinvestment revenue for the current fiscal year. In FY23, disinvestment proceeds hit `35,294 crore, compared with the target of Rs 50,000 crore, thanks to the move to postpone the OFS plan for Hindustan Zinc Ltd. However, the shortfall in disinvestment revenue was more than offset by larger-than-anticipated dividends by central public sector enterprises. RVNL recorded a net profit of Rs 34.5 crore for the March quarter, against Rs 37.2 crore a year before.