RVNL shares drop 4% as retail portion of OFS opens for subscription
Rail Vikas Nigam (RVNL) dropped 4% to Rs 121 on the NSE on Friday as the Offer For Sale (OFS) for retail investors opened for subscription. The sharp fall in RVNL shares was accompanied by strong volumes as nearly 3 crore shares changed hands on the exchanges around 10:30 am. The government has decided to exercise the green shoe option, where it will sell an additional 1.96% stake.
Friday is the T+1 day, and retail investors are allowed to place their bids. About 10% of the offer is reserved for allocation to retail investors subject to the receipt of valid bids. The retail portion was subscribed 10.61% or 0.016 times around this time.
The OFS, which kicked off on Thursday, received a strong response from non-retail investors with the shares getting oversubscribed by 2.73 times. The government has set a floor price of Rs 119, which was at a 12% discount from Wednesday's price. Under the proposed OFS, the government will be offloading about 7.08 crore equity shares, representing 3.4% equity on Day 1, which is the T day.
The allocation will be made at or above the floor price on a price priority basis at multiple clearing prices, except in the case of retail investors, who will have the option to bid at the cut-off price.IDBI Capital Markets and Elara Securities are acting as the brokers for the offer. On Thursday, shares of RVNL fell nearly 7% to Rs 126 on NSE. The stock has fallen over 17% since hitting its 52-week high of Rs 146.65 on Monday, July 24.
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