What is Rail Vikas Nigam IPO, and what is the benefit in investing in IPO?

JA Jayrajsinhsolanki asked on 15 June 2020, 11:38
2 answers / 884 views / 8 votes
MA
initial public offering of state-run Rail Vikas Nigam is fixed at rs 17-19 per share. the benfit of investing in an IPO is ability to raise capital quickly by reaching a huge number of investors. the comoany can then use the cash for further in their business.
SR
  • What is an IPO( Initial Public Offering)?

It is a process where a private company is open for outside investors thus going public.Small growing companies require outside funding to increase and expand their business operations. These companies sell their shares to the public investors to raise capital. The public investors would then get ownership in the company for the value of the shares purchased. These shares are then listed on the stock exchanges.The whole process of IPO is monitored and controlled by SEBI(Securities and Exchange board of India).The company should first register itself with SEBI to sell their shares to the public investors.

  • Benefits of investing in IPO.

If the company grows you will get good percentage of Dividend as a shareholder. In this case as per reports by brokerage firms, dividend is expected to be 4%.

  • Ask yourself few important questions before investing in IPO.

Read the reports, prospectus of the company and where they will put your money into?

If the money is utilized for short term or long term goals?

Strategies implemented by the company?

Go through SWOT & PESTLE analysis of the company.

Future prospects and P/B,P/E,ROE,CAGR of the company.

Know about their products and services.

Will investing in this company can improve your portfolio?

Know your Risk exposure before investing in a company.

  • Possible risks in IPO investments.

Volatile markets can make share price go up and down.

if the company faces a mismanagement,investors can lose their money.

Economic effects on the sector may havoc their ongoing projects resulting in debts, crash of share price and no dividend.

  • Rail Vikas Nigam IPO.

RVNL -Rail Vikas Nigam Ltd.

RVNL is completely owned by government with an objective to undertake development of railway projects like new lines, doubling, gauge conversion, railway electrification, metro projects, workshops and major bridges. It follows an asset-light model and the the contractor provides all the machinery, plants &stores for execution of project.

  • Why RVNL?

It has got attractive valuation and financials.

Standardized operating procedures

Authorized by MoR

Consistent growth and good number of ongoing projects.

order book size was-Rs.77504.28 cr.

Company promoters- President of India Acting through Mor and GoI.

  • IPO Details:

Issue price-29/03/2019

Issue close-03/04/2019

Type-Book Built issue IPO

Price-Rs.17–19

Employee/Retail Discount- Rs.0.50

Face Value-Rs.10

Min lot-780 shares

Min. Investment-Rs.14820

Market Cap-Rs.3961 cr

Listing-NSE/BSE

Expected Dividend -4%

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