Rail Vikas Nigam share sale subscribed 63%

The Rs 860-crore share sale in Rail Vikas Nigam by the Centre saw muted response from investors on Wednesday. Out of total of 312.7 million shares put on the block, institutional investors subscribed to only 198 million shares in the offer for sale (OFS), data provided by stock exchanges showed.

Market players said the volatility in the secondary market impacted demand. Shares of Rail Vikas dropped 9.2 per cent to end at Rs 27.65. The floor price for the OFS was set at Rs 27.5.

Centre currently holds 87.84 per cent stake in Rail Vikas, the project executing agency for the Indian Railways. Had the OFS been fully subscribed, Centre would have been able to pare its holding by 15 per cent.

The final proceeds for the share sale will depend on the demand in the retail investor segment. About 31.3 million shares meant for retail investors will be auctioned on Thursday.

According to the DIPAM website, the centre has sold minority stakes in 10 listed PSUs so far this financial year to mobilise Rs 27,070 crore.

Shares of Rail Vikas have gained 2.7 times in the past one year. The company had come out with an IPO in March 2019. The stock was priced at Rs 19 in the IPO.