The IPO of Rail Vikas Nigam Ltd. (RVNL) opened for subscription on Yesterday. The rail Public Sector unit (PSU) has issued 25.34 crore shares between price range of ₹17-19 per equity share which are open for subscription till April 3.
As per NSE, the IPO was subscribed 0.09 times at the end of the day one. The IPO was open for 25,34,57,280 shares for which 2,19,01,620 shares received bids making it just 9% of the overall shares open for subscription.
With this IPO, Railway Ministry controlled RVNL will raise about ₹481.6 crore. Also, out of total 25,34,57,280 equity shares 6,57,280 will be reserved for the employees. The offer and the net offer shall constitute 12.16% and 12.12%, respectively, of the post offer paid-up equity share capital of the company.
Yes Securities (India) Ltd, Elara Capital (India) Private Ltd and IDBI Capital Markets & Securities Ltd are the book running lead managers to the RVNL’s IPO.
Alankit Assignments is the registrar for the ongoing IPO. Investors who are willing to subscribe have to apply for minimum 780 shares or in its multiple. Also, the eligible employees and retail investors will get a discount of ₹0.50 per share each on the offer price.
Listing of shares-
Listing of the RVNL will be on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The trading of share will commence by 9 or 10 April. RVNL will be third rail PSU to go public and be listed after RITES and IRCON.
RVNL’s Financial Report-
At the end of the last quarter, RVNL’s order book stood at ₹77,504 which is 10.2 times its revenue in FY 2018. (An order book is a business’s list of open, unshipped, customer orders, normally time-phased and valued at actual individual order prices, that may include margin and profitability analysis and manifests the companies’s failure or success) The order book contained 102 on going project, 96.25% of which is accounted by Indian railways.
The company is paid by government a consolidated management fee for its annual expenditure done on the execution of various projects- This fee varies from 9.25% for the metro projects, 8.50% for other plan heads and 10% for national projects.
RVNL FY 2018 Report-
In FY 2018 RVNL’s consolidated operational revenue was at ₹7,597 crore while its net profit stood at ₹570 crore with an EBTIDA margin of 5.1% in FY 2018.
Should investors Subscribe or not?-
Most of the Brokerage firm are of unanimous view that the IPO can be subscribed with a longer term perspective.
“Given the government focus on rail infrastructure spends (metro, port-rail connectivity, electrification etc), healthy order book, asset-light model and reasonable valuation, we suggest that investors can Subscribe to the issue from a long-term perspective,” commented Centrum Broking on the RVNL’s IPO
Another Brokerage firm, Dolat Capital had same views over IPO and said, “Given the government focus on rail infrastructure spends (metro, port-rail connectivity, electrification etc), healthy order book, asset-light model and reasonable valuation, we suggest that investors can Subscribe to the issue from a long-term perspective.”