Rail Vikas Nigam bags order worth Rs 1,088 crore; check OFS updates, share price & other details

Rail Vikas Nigam Ltd (RVNL) on Friday received a Letter of Award (LoA) from Haryana Rail Infrastructure Development Corporation (HRIDC) for a project worth Rs 1,088 crore. The LoA is for "Package No. C-4: Composite Contract Package in connection with New BG railway line of HORC project." The estimated cost of the project is Rs 1,088.49 crore, to be executed in 1,460 days (4 years). The stock today was last seen trading 3.96 per cent lower at Rs 121.15.

The company has decided to sell more shares in the ongoing offer for sale (OFS) by exercising the oversubscription option. The two-day OFS saw a strong start, as the quota for non-retail investors got 2.73 times subscription on the Day 1 of the bidding process. Retail investors got the opportunity to participate in the OFS today. The OFS is scheduled to close at 3:30 pm.

On Thursday, RVNL said it would exercise the oversubscription option to the extent of 40,866,394 equity shares, representing 1.96 per cent of the total paid-up equity share capital of the company, in addition to 70,890,683 equity shares of the company that represented 3.40 per cent of the total paid-up equity share capital and formed a part of the base offer size.

Accordingly, the total offer size will be up to 1,11,757,077 shares, representing 5.36 per cent of the total paid up equity share capital of the company.

In a separate development, the company has recently established its solely-owned subsidiary company named 'Kinet Railway Solutions Ltd'. According to the Share Purchase Agreement signed, RVNL holds a 25 per cent stake, while joint stock company Metrowagonmash and Locomotive Electronic Systems possess 70 per cent and 5 per cent stakes, respectively.

The stock was last seen trading higher than the 100-day and 200-day moving averages but lower than the 5-day, 20- and 50-day moving averages. The counter's 14-day relative strength index (RSI) came at 45.94. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 20.74 against a price-to-book (P/B) value of 4.27.

The scrip has an average target price of Rs 130, Trendlyne data showed, suggesting a potential upside of 7 per cent. It has a one-year beta of 0.72, indicating low volatility on the counter.

RVNL is an executing arm of Indian Railways and works for and on behalf of the ministry for projects assigned to it for execution. It works on a turnkey basis and undertakes the full cycle of project development from conceptualisation to commissioning including stages of design, preparation of estimates, calling and award of contracts, projects and contract management.

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