Shares of this multibagger PSU rail stock slipped 6 percent in Thursday’s trading session after the Promoter proposed to sell a stake in the company.
With a market capitalization of Rs 26,271 crores, the stocks of Rail Vikas Nigam Limited closed at Rs 126 apiece exhibiting a fall of 6 percent as compared to the previous close of Rs 134.25.
Keeping a purview of one year, the company’s stock has proven to deliver multibagger returns of 304 percent to its stakeholders. It means if someone would have invested Rs 1 Lakh into the stock, it would have converted to Rs 4.04 Lakhs within a period of one year.
Such sharp movements in the company’s share prices are attributable to the recent filing the company published with the BSE proposing an offer for sale (OFS) of the company’s shares with a Face Value of Rs 10 each.
The Government is set to divest a 5.36 percent stake, i.e., 11.17 crore shares of the company at a floor price fixed at Rs 119 per equity share representing a discount of approximately 5.50 percent as compared to the company’s closing price on July 27th.
Out of the above-mentioned shares to be kept for OFS, around 4 crore shares equating to 1.96 percent of the total paid-up equity capital will be sold via an ‘oversubscription option’ through a separate designated window of the BSE. For non-retail investors, the OFS will open on July 27th, and, for retail investors, the OFS will open on July 28th.
Having a quick walkthrough of the company’s consolidated financials, the basic parameters such as the operating revenues and net profits showed decent growth YoY with the former increasing from Rs 19,381 crores during FY21-22 to Rs 20,281 crores in FY22-23, and, the latter taking a shift from Rs 1,079 crores to Rs 1,261 crores keeping the timeframe the same.
Coming onto the profitability ratios, the company observed marginal up movements in the return on equity (RoE) moving from 18.48 percent during FY21-22 to 19.39 percent in FY22-23. Moreover, the return on capital employed (RoCE) moved from 15.05 percent to 15.88 percent.
Rail Vikas Nigam Limited (RVNL) is a company undertaking a wide range of development projects. The company works on a turnkey basis and takes up the full cycle of project development right from the conceptualization stage to commissioning which includes stages of design, estimate preparations, contract management, and many more.
Written by Amit Madnani
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