RITES declines over 7% in two sessions ahead of OFS

RITES tumbled 4.08% to Rs 283 for a second day after the government proposed sale of equity shares of the company through an offer-for-sale.

The government has proposed to sell 2.50 crore equity shares, in aggregate representing 10% stake, in the company on 22 November 2019 (for non-retail investors only) and on 25 November 2019 (for retail investors and for non-retail investors), with an option to additionally sell up to 1.25 crore equity shares, representing 5% stake, through an offer-for-sale (OFS).

The floor price for the OFS is Rs 293.50 per share. Retail investors will be allocated shares at a discount of 5% to the cut-off price.

The stock has tumbled 7.49% in two consecutive trading sessions from its previous closing high of Rs 305.85 on 21 November 2019.

On the technical front, the stock's RSI (relative strength index) stood at 43.862. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock was trading above its 50-day and 200-day moving average (DMA) placed at Rs 270.62 and Rs 225.91 respectively.

RITES is a public sector enterprise (PSE) and a leading player in the transport consultancy and engineering sector in India, having diversified services and geographical reach. Government's stake in RITES stood at 87.4% as on 30 September 2019.

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