The issue with these kind of stocks is that sooner or later there would be a OFS and one should be ready to digest the volatility – that happened recently with IRCTC.
In case of RVNL, the Govt holds 78% and they would have to mandatorily reduce to 75%.
And whenever there is an OFS, the govt sells @7-10% discount to market price and most people especially the traders involve in short selling in order to buy at lower levels. Even some investors sell stocks in order to buy at lower level.
However , if you are a long term investor , you need not worry these kind of short term volatility, as long as order book is bulging and earning visibility is there.
Discl: Invested at a price point of @ Rs 30 a share. Partially profit booked recently and in the process of adding again at decline.
It is not an investment advice. Please do your own assessment before investing.
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