RailTel IPO opens Feb 16; check grey market premium, price band, lot size, other details

State-owned RailTel Corporation of India Ltd’s initial public offering (IPO) will open for subscription next week on February 16 and close on February 18, 2021. The price band of the public issue has been fixed at Rs 93-94 per share of the face value of Rs 10 each. RailTel Corporation of India Ltd public issue is entirely an offer for sale (OFS) of 8.71 crore equity shares by the government; the government could raise up to Rs 819 crore at the higher end of the price band. The company has reserved up to 5 lakh equity shares for the RailTel Corporation of India Ltd’s employees. The issue can be applied through ASBA only.

RailTel Corporation of India Ltd shares were trading at a grey market premium of Rs 32 apiece, or 34 per cent over the IPO price on Thursday. The shares were seen trading at Rs 126 apiece in the grey market today. The company is the seventh public issue so far this year after Indian Railway Finance Corporation, Indigo Paints, Home First Finance Company, Stove Kraft and Brookfield India Real Estate Trust. Nureca Ltd initial public offering is the sixth issue which is set to open for subscription on February 15, 2021.

Who can bid for how much?

The bids for the issue can be made for a minimum of 155 equity shares and in multiples thereafter, implying a minimum application amount of Rs 14,570. Up to 50 per cent of the net issue or 43.32 crore shares worth Rs 407.3 crore at a higher price band will be reserved for Qualified Institutional Buyers (QIB). The company has reserved not less than 35 per cent of the issue or 30.3 crore equity shares of Rs 285 crore for the retail investors and the remaining 15 per cent or 12.9 crore shares worth Rs 122.2 crore at a higher price band for Non-Institutional category.

The equity shares are proposed to be listed on both BSE and NSE. The book running lead managers to the issue are ICICI Securities Ltd, IDBI Capital Markets and Securities Ltd, and SBI Capital Markets Ltd, while the registrar to the offer is KFin Technologies Private Ltd. The company has no listed peers in India that engage in a business similar to that of RailTel Corporation of India Ltd. For the year ended on March 31, 2020, RailTel Corporation of India Ltd reported a profit of Rs 141 crore.

RailTel: Mini Ratna firm India’s largest neutral telecom infrastructure providers

RailTel is an information and communications technology (ICT) infrastructure provider firm and one of the largest neutral telecom infrastructure providers in India, according to a CRISIL report). The company is a Mini Ratna (Category-I) Central Public Sector Enterprise, wholly-owned by the Government of India and under the administrative control of the Ministry of Railways. RailTel is engaged in modernization of the existing telecom system for train control, operation and safety and to generate additional revenues by creating nationwide broadband and multimedia networks by laying optical fiber cable by using the right of way along railway tracks.