Govt scouts for merchant bankers, selling brokers for disinvestment of 15% stake in RVNL

• Earlier, 12.16 percent share of equity in RVNL was disinvested through Public Issue in April 2019

• The government is also considering allotting shares to eligible and willing employees of RVNL at a discount

New Delhi: Weeks after the Mazagon Dock Shipbuilders Limited initial public offer (IPO) received an overwhelming response from investors, the government is now looking to set the ball rolling on another disinvestment plan — offloading of 15 percent stake in Rail Vikas Nigam Ltd (RVNL). According to a notification posted on its website, the Department of Investment and Public Asset Management (DIPAM) is looking to engage merchant bankers and selling brokers for the disinvestment of 15 percent stake in RVNL through offer for sale (OFS).

"The GoI intends to disinvest up to 15 percent paid up equity capital of RVNL out of its shareholding of 87.84 percent through 'Offer for Sale' (OFS) method of shares by promoters through the stock exchanges' as per Securities and Exchange Board of India (SEBI) Rules and Regulations," the notification said.

RVNL has net worth of Rs 4,499.77 crore

The authorised share capital of RVNL is Rs 3,000 crore and paid-up share capital is Rs 2,085 crore, fully subscribed by the Ministry of Railways. The paid-up equity capital of the PSU is Rs 2,085 crore as on March 31, 2020. The government holds 87.84 percent of the equity. The government had earlier disinvested 12.16 percent share of equity through Public Issue in April 2019. The face value of each equity share is Rs 10. 

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Profit after Tax (PAT) for the fiscal 2019-20 was Rs 789.86 crore for RVNL. As on March 31, 2020, the company had a net worth of Rs 4,499.77 crore. 

Govt mulls allotting shares to eligible employees

"The government is also considering allotting shares to eligible and willing employees of RVNL at a discount to the issue/ discovered price (lowest cut off price) up to a maximum of certain percentage of the OFS size subsequent to the completion of the transaction under OFS. The percentage and extent shall be decided in due course," the document said.

RVNL

RVNL, which comes under the Ministry of Railways, is engaged in engineering tasks required by the Railways. It is responsible for raising extra-budgetary resources and execution of projects relating to creation and augmentation of capacity of rail infrastructure speedily.

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