RailTel Corporation of India Limited IPO Details and Review

Dates, Price band, Lot size, Risks, Review and broker recommendations etc.
RailTel IPO

RailTel IPO: Key Details

  • Raised ₹243.99 crore via anchor investor sale of 2,59,57,446 shares @₹94
  • IPO subscribed 6.65 times on Day 2

Note: We neither trade nor encourage our readers to trade in the Grey Market. We share the GMP information for educational purposes only, so that, you can make an informed decision.

Company Information

RailTel Corporation of India, incorporated 2000, 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. It is an information and communications technology (“ICT”) infrastructure provider and is one of the largest neutral telecom infrastructure providers in India.

As of June 30, 2020, its optic fiber network covers over 55,000 route kilometres and covers 5,677 railway stations across towns and cities in India. The transport network is built on high capacity dense wavelength division multiplexing (“DWDM”) technology and an Internet protocol/ multi-protocol label switching (“MPLS”) network over it to support mission-critical communication requirements of Indian Railways and other customers.

Their portfolio of services can be broadly classified as below:

  • Telecom Network Services – National Long Distance (“NLD”) Services and Internet Service Provider (“ISP”) Services
  • Telecom Infrastructure Services – Passive Infrastructure (“IP-1”) Services
  • Managed Data Center and Hosting Services – Data Centre and Managed Hosting Services, Telepresence Services (“TPaaS”), and Security Operations Centre as a Services (“SOCaaS”)
  • Projects (System Integration Services) – ICT Hardware, Software and Service System Integration Projects, digital services and other services
RailTel IPO Revenue

Competitive Strengths

  • Among the largest neutral telecom infrastructure providers in India with pan-India optic fiber network
  • Diversified portfolio of services and solutions
  • Key partner to the Indian Railways in digital transformation
  • Experience in executing projects of national importancewith a robust pipeline of projects
  • Strong track record of financial performance

Company Strategy

  • Continue to expand its telecom services and deploy the latest technologies
  • Further diversify services and solutions with a focus on Indian Railways
  • Expand the services outside India

Proceeds from RailTel IPO will be used to:

  • Carry out the disinvestment of 8,71,53,369 Equity Shares by the selling shareholder constituting 27.16% of Company’s paid-up Equity Share capital
  • Achieve the benefits of listing the Equity Shares on the Stock Exchanges.

The Company will not receive any proceeds from the Offer and all proceeds shall go to the selling shareholder (Government of India).

Further, the company expects that the listing of the Equity Shares will enhance its visibility and brand image among existing and potential customers.

RailTel IPO: Financials

201820192020
Revenue from Ops976.78 Cr1,003.27 Cr1,128.05 Cr
Profit before Tax159.61 Cr217.69 Cr184.76 Cr
Profit after Tax141.07 Cr135.36 Cr134.01 Cr
EPS (Basic)4.184.224.40

RailTel IPO Dashboard

Issue Details

TypeValue
Issue Size₹819.24 Cr
Offer for Sale₹819.24 Cr
Face Value₹10/- per Equity Share
IPO Price₹93 – ₹94
Lot Size155 shares
LotsMin 1 – Max 13

Key Dates

Date TypeDate
Bid Open16/02/2021
Bid Close18/02/2021
Allotment Finalization24/02/2021
Initiation of Refunds25/02/2021
Credit of Shares26/02/2021
Listing Date01/03/2021

Lot Size and Price

LotsSharesAmount
1155₹14,570
132015₹1,89,410

Promoter Holding

HoldingPercentage
Pre-Issue100%
Post-Issue72.84%
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RailTel IPO: Investor Quota and Shares Offered

Investor TypeQuotaShares on Offer
QIB50%1,73,69,237* shares
NII15%1,29,98,006 shares
RII (Retail)35%3,03,28,680 shares
Employee5,00,000 shares
Total100%6,11,95,923* shares
*Shares left for after anchor investor sale of ₹243.99 crore

RailTel IPO: Risks

  • The telecommunications industry in India is highly regulated and changes in laws, regulations or governmental policy could potentially adversely affect the business
  • Company is dependent on and derive a substantial portion of the revenue from PSU customers, the Indian Railways and other GoI entities as well as State Governments, which exposes them to risks inherent in doing business with them
  • If the company do not continue to provide telecommunications or related services that are technologically up to date, the company may not remain competitive
  • Company is involved in certain legal proceedings, any adverse developments related to which could materially and adversely affect the business, reputation and cash flows
  • Internet security concerns and illegal distribution by third-parties could adversely affect the broadband internet access services

For complete internal and external risk factors, you can refer the DRHP of the company.

RailTel IPO: Registrar and Lead Managers

Registrar of the Issue

KFin Technologies Private Limited
Selenium Building, Tower-B, Plot No 31 & 32,
Financial District, Nanakramguda, Serilingampally,
Rangareddi, Telangana India – 500 032.

Phone: +91 40 6716 2222
E-mail: [email protected]

Lead Managers of the Issue

ICICI Securities Limited
IDBI Capital Markets & Securities Limited
SBI Capital Markets Limited

Tel: +91 22 2288 2460
Email: [email protected]/
[email protected]

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