Multibagger railway stock jumps after it emerges as the lowest bidder for Rs 112 crore project 

Formed in 2002, Rail Vikas Nigam Ltd. (RVNL) is a public-sector undertaking under the Ministry of Railways. It is responsible for the implementation of infrastructure projects of the Railways Ministry in India. These projects can be the installation of railroad tracks, their upgrade/changes, railway electrification, building major bridges, and setting up workshops or production units. 

The shares of RVNL rose 4% to touch their day’s high of Rs 64.60 on Friday. However, the stock erased some of the gains and closed at Rs 62.95 per share, up 1.53% for the day. 

This movement in share price follows the news that RVNL has emerged as the bidder with the lowest quotation for the supply, installation, testing, and commissioning of an 11 KV line project in Madhya Pradesh. The project has been valued at Rs 111.85 crore. 

The stock of RVNL has generated a multi-bagger return of 106% in the last 10 months. The scrip has gone up to the present price from Rs 30.5 levels it used to trade in mid-May. Thus, Rs 1,00,000 invested ten months ago would have become Rs 2,06,000 by now. This would have resulted in multi-bagger gains of Rs 1,06,000. 

This jump in stock price comes on the heels of back-to-back order wins from the company. Late last year, RVNL was the successful bidder for an international project in the Maldives worth Rs 1,544.60 crore (approx.). In addition to this, the Railways Ministry awarded it a Rs 137.55 crore contract as part of the East Central Railway. 

The management stated in the annual report for the financial year 2021-22 that it is taking multiple steps to bring down its costs and ensure timely deliveries of various projects. Furthermore, it had also submitted its request to the government to allow it to raise more funds by leveraging its equity base. 

Written by Vikalp Mishra

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