RailTel IPO opens for subscription; share allocation likely to be finalised by 23 February – Business News , NewsGater

RailTel Corporation of India Rs 819.24-crore initial public offering (IPO) opened for subscription on February 16.

The company received a 35 percent subscription in 40 minutes of the bidding process By 10:40 am, the issue had received offers for 2,15,16,635 shares, which was 35 percent of the total issue size of 6,11,95,923 shares.

The Central Public Sector Mini Ratna (Category I) state-owned company aims to raise Rs 819.24 crore through a public issuance that will close on February 18. However, the company does not receive funds from the IPO as all the money will go to the Government of India.

RailTel derives 66 percent of its revenues from the telecommunications segment. The remaining portion is derived from railways and other projects.

The allotment of shares in RailTel’s IPO is likely to end on February 23. Subsequently, the listing can take place on February 26. ICICI Securities, IDBI Capital, SBI Capital Markets are the commercial bankers of the issue. The government plans to raise around 819 million rupees through the issue.

According to a report, 50 percent of the issuance is held for qualified institutional buyers, while 35 percent has been marked for retail investors and 15 percent has been held for non-institutional bidders.

RailTel reported stable financial performance during fiscal year 18-20. The company saw a 7.5 percent CAGR increase in gross revenue to Rs 1,128 crore in fiscal 2020. The telecommunications services business, which contributed around 67.7 percent, increased by 4 , 3 percent CAGR. Project business increased by a 13.8 percent CAGR during fiscal year 18-20.

HDFC Securities in an IPO note said that RailTel serves as a key network for Indian railways and that, as of January 31, 2021, RailTel’s fiber optic network covers 59,098 route kilometers and 5,929 train stations in towns and cities in India.