Shares of Rail Vikas Nigam or RVNL today closed at 20% upper circuit of 23.65, valuing the state-run company at nearly 5,000 crore. Including today’s gains, Rail Vikas Nigam shares are up 25% in three days after getting listed on Thursday. On Day 1 of listing, shares of Rail Vikas Nigam Ltd (RVNL) made a tepid market debut on Thursday and closed flat at 19.05 against the issue price of 19.

Rail Vikas Nigam’s 480-crore initial public offer was subscribed 1.8 times earlier this month and price range for the issue was fixed at 17-19 per share.

Rail Vikas Nigam is in the business of executing railway projects, including new lines, gauge conversion, railway electrification, metro projects, major bridges and construction of cable stayed bridges.

Many brokerages had recommended “subscribe for the long term" to Rail Vikas Nigam IPO, citing valuation comfort, government’s thrust infrastructure and strong order book.

As of 31 December 2018, RVNL’s order book stood at 77,504 crore (10.2 times FY18 revenue), which includes 102 ongoing projects. Out of this, Railways accounted for 96.11% of its total order book.

RVNL is paid a consolidated management fee by the Railways based on the annual expenditure incurred for the execution of projects: 9.25% for the metro projects, 8.50% for other plan heads and 10% for national projects.

In FY18, RVNL’s revenue from operations on consolidated basis amounted to 7,597 crore and net profit at 570 crore, with an EBITDA, or earnings before interest, tax, depreciation and amortization, margin of 5.1%. The company's revenue from operations has increased at a CAGR of 29.36% from FY16 to FY18 while net profit grew at a CAGR of 15.20% during the same period.