Rail Vikas Nigam Limited share sale via initial public offering (IPO), which started on Friday, was subscribed 48 per cent as of 5 pm on third day of the issue. Over 12 crore bids were received by National Stock Exchange and BSE Ltd. for over 25 crore shares on offer, according to all exchanges demand graph on the National Stock Exchange website, nseindia.com.
Rail Vikas Nigam Limited is selling shares in the price band of Rs 17-19 aggregating to the issue size of Rs 430.87 crore - Rs 481.57 crore. The issue will be closed tomorrow.
Rail Vikas Nigam Limited (RVNL) is a wholly owned government company which was incorporated by the Ministry of Railways in 2003. It works as a project executing agency for and on behalf of Ministry of Railways.
Canara Bank Securities in a note to its clients recommends subscribing to the stock in the Rail Vikas Nigam IPO. As of March 31, 2018, the company had an EPS (earning per share) of Rs. 2.73 and NAV (net asset value) of Rs. 18.83.
"The company would trade at 6.96 times price to earnings ratio and 1.01 times its price to book value for FY18 earnings. We believe that the stock is fairly priced. One may subscribe to the IPO for long term gains," Canara Bank Securities said in a note.
Given the government's 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, Centrum added in the note.
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