Navratna CPSE Stock Dip 5% As Retail Investors Bid In OFS, Offer Fully Subscribed

Offer for sale (OFS): Rail Vikas Nigam, a 'Navratna' CPSE in India, extended a bearish tone on Friday as retail investors bid in the offer for sale (OFS) through which the government is selling a 5.36% stake. Retail investors are bidding on July 28, after the OFS oversubscribed by institutional investors on July 27.

At the time of writing, Rail Vikas Nigam's share price traded at Rs 120.05 apiece, down by Rs 6.10 or 4.84% on BSE. The stock traded near its intraday low of Rs 119.75 apiece.

On Friday, retail investors and those non-retail investors who chose to carry forward their un-allotted bids -- are allowed to bid in the OFS.

As per the BSE data, retail investors as of now on July 28, have bid for 11,51,132 equity shares.

The government planned to raise nearly Rs 1329.91 crore through the OFS which opened on July 27 with non-retail investors bidding on that day.

However, as per the BSE data, the OFS is fully subscribed.

On July 27, non-retail investors bid for 17,44,72,178 equity shares against the offered size of 6,38,01,614 equity shares -- hence, oversubscribed by 273.46% or 2.73 times.

Non-retail investors bidding valued at nearly Rs 2124.37 crore at the indicative price of Rs 121.76 apiece.

Rail Vikas Nigam's OFS included a base offer of 70,890,683 equity shares representing 3.40 % of the total paid-up equity share capital of the company. While government also planned to sell an additional 40,866,394 equity shares representing 1.96% of the total paid-up capital.

Together, the government planned to offload 111,757,077 equity shares, representing 5.36% of the total paid-up equity share capital of the company.

The floor price of the OFS was set at Rs 119 per share.

Rail Vikas Nigam is a CPSE working as the construction arm of the Railway Ministry. The company was incorporated to ​undertake and execute successfully the project development, financing and implementation of projects related to rail infrastructure.

Despite the latest drop, Rail Vikas Nigam has given strong returns to its investors year-to-date. So far in 2023, the stock's upside is nearly 77% on BSE. While in a year, the stock is a multi-bagger and gained by over 291%.