Rail Vikas Nigam Limited (RVNL) recorded share price as 52 weeks high. The movement was almost double in the share price of RVNL in last one month. The increase was due to taking up of various new projects in rail construction and also RVNL is added to the category of ‘Navratna’ status from ‘Mini ratna’. Many other companies in same sector such as IRCON and IRFC has seen growth in their share price by 32% and 20%.
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About Rail Vikas Nigam Limited (RVNL)
Rail Vikas Nigam Limited is an Indian public sector undertaking which works as the construction arm of the Ministry of Railways for project implementation and transportation infrastructure development. It was incorporated in 2003 to meet the country’s surging infrastructural requirements and to implement projects on a fast-track basis. It is a ‘Navratna’ CPSE and Public Sector Undertaking (PSU) under the administrative control of the Indian Ministry of Railways.
The organization undertakes project execution from concept to commissioning and creates project-specific SPVs. RVNL’s mandate includes the mobilization of extra-budgetary resources (EBRs) through a mix of equity and debts via these SPVs.
It is an offshoot of the implementation of National Rail Vikas Yojana (NRVY) announced from the ramparts of the Red Fort by the then Prime Minister, Shree Atal Bihari Vajpayee, during the Independence Day speech on 15 August 2002. NRVY was formally launched by the Hon’ble PM on 26 December 2002 to bridge rail infrastructure deficit. RVNL came into being on 24 January 2003. RVNL initiated its IPO on 29 March 2019 and became listed on 11 April 2019. The 3 pillars of RVNL are: Quality, Speed & Transparency.
Reason Behind Increase in Share Price
The recent sharp movement in the share price came due to three reasons. First, RVNL has emerged as the lowest bidder for three underground packages of the Chennai Metro Rail Limited (CMRL) phase-II project, worth Rs 3,146 crore (in total). Second, the company has been granted the ‘Navratna’ status by the Department of Public Enterprises. And third, RVNL-SCC joint venture has emerged as the lowest bidder for Mahi Bajaj Sagar Project, Banswara (Rajasthan), worth Rs 2,249 crore.
Movement in Share Price
Shares of Rail Vikas Nigam Ltd (RVNL) continued their upward move on Tuesday for the second straight session. The stock today jumped 10 per cent to hit its 52-week high of Rs 118.40 against a previous close of Rs 107.64. At today’s high price of Rs 118.40, the counter has surged 308.28 per cent from its 52-week low of Rs 29, a level seen on June 21, 2022. The multi-bagger counter has gained 249.25 per cent in the past one year.
Prediction by Analysts
Rahul Ghose advised fresh investors to initiate a buy on this stock after a small consolidation at the 115/110 levels, keeping a stop loss below 101. The stock is also seen walking the band in higher time frame charts, which adds to its positive bias. For those who already hold the stock, Ghose recommended that they hold the same with a stop loss at Rs 100.
Pravesh Gour, Senior Technical Analyst, Swastika Invest mart, said that RVNL is in a strong uptrend and may see some pause at an immediate resistance level of 140 but may head towards 150 levels. On the downside, the major support level is Rs 100 at any correction, while Rs87 is the next critical demand level. Gour said, “Investors have to suggest that they please follow the buy-on-dip strategy when taking a new position on the counter”.
“We advise investors to enter at lower levels as we feel that most of the positives are already priced in and timely execution of the order book would be key for further traction in the stock over the medium-to-long term horizon,” said Manish Chowdhury, Head of Research, Stoxbox.
