The ₹819 crore IPO from RailTel owned by Indian Railways will open next week — grey market suggests a 34% premium at ₹93-94 a share

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The ₹819 crore IPO from RailTel owned by Indian Railways will open next week — grey market suggests a 34% premium at ₹93-94 a share
BCCL
  • RailTel IPO will open on February 16 and remain open till February 18.
  • This would be the seventh initial public offerings this year, and second by the Ministry of Railways after it recently pared stake in Indian Railway Finance Corporation IPO.
  • The company has set the price band for the issue at ₹93-94 per share.
The ₹819 crore initial public offering (IPO) of state-run RailTel Corp of India will hit the capital markets next week. The IPO will open on February 16 and remain open till February 18.

The government will sell a 27.16% stake in the company. The offer comprises an offer for sale of up to 87 million shares by its promoters, of which 5,00,000 shares will be reserved for eligible employees.

The price band for the issue has been set at ₹93-94 per share.

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This would be the seventh initial public offerings this year, and second by the Ministry of Railways after it recently pared stake in Indian Railway Finance Corporation IPO— which listed at a 4% discount last month.

RailTel Corp of India opens next week

ParticularsIssue details
Opens onFebruary 16
Closes onFebruary 18
Price band₹93-94 per share
Minimum bid 155 equity shares
Reservation for qualified institutional buyers50%
Reservation for non-institutional buyers15%
Reservation for retail investors35%

Once the IPO is concluded, the equity shares will be listed on both the exchanges — BSE and NSE. ICICI Securities, IDBI Capital Markets & Securities and SBI Capital Markets are the book running lead managers for its public offering IPO.

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RailTel Corp of India IPO: All you need to know
  • RailTel is a Mini Ratna (Category-I) Central Public Sector Enterprise, wholly-owned by the Government of India and under the Ministry of Railways' administrative control.
  • It 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 engaged in the modernization of the existing telecom system for train control, operation and safety and generates additional revenues by creating nationwide broadband and multimedia networks by laying optical fibre cables along railway tracks.
  • The company operated data centres in Gurugram, Haryana and Secunderabad, Telangana to host and collocate critical applications for customers including the Indian Railways.
  • As of September 30, the company's net worth was ₹1,394.63 crore, with no debt on its balance sheet.
  • It is worth noting that RailTel will not receive any proceeds from the offer for sale and the same will go to the Government of India, the promoter of the company.
  • The grey market premium suggests an upside of ₹32 for the price band set at ₹93-94 per share.
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