RailTel IPO Fully Subscribed on Day 1; overall 2.64 times

Chennai: RailTel Corporation of India Limited (“RailTel”), one of the largest neutral telecom infrastructure providers in the country, received bids of 16,13,30,820 shares against the offered 6,11,57,360 equity shares, as per the 5:00 pm Day 1 data available on the bourses. The portion reserved for retail investors was subscribed 4.99 times. While the Qualified Institutional Buyer remained unsubscribed the Non-Institutional Investor category was subscribed 0.75 times. The employee reservation category is subscribed 0.81 times. The total size of the offer is of Rs. 819.24 cr at the upper price band of Rs. 94 per share.

The Offer comprise of 87,153,369 equity shares of face value of ₹10 each and is a complete offer for sale by the Government of India; therefore the Company will not be directly receiving any proceeds from the same. The minimum bid lot is of 155 equity shares, thereafter in multiples. The price band has been fixed at Rs. 93 – Rs. 94 per Equity Share.

Recently the company raised 244 Cr from 14 Anchor Investors which included participations from renowned global portfolio investors such as UK based, Aurigin Capital via its Aurigin Master Fund and Utilico Emerging Markets Trust, Reliance Capital managed, Cohesion MK Best Ideas Sub-Trust, Singapore based, Integrated Core Strategies Asia and Goldman Sachs India.


Some key Domestic Investors like HDFC Life Insurance Company, ICICI Prudential MF, Aditya Birla Sun Life Insurance, Tata MF, Edelweiss AIF participated in the anchor investment. The shares were allotted to anchor investors at Rs. 94 per equity share.


Key brokerage houses like Axis Capital, Angel Broking, Asit C Mehta, Reliance Securities, BP Equities, Choice Broking, KR Choksey, Hem Securities, Marwadi Fianncial Services, Progressive have recommended investing in the public issue citing the strategic relationship and role the company will play in digital transformation of the Indian Railways, its return ratios being better compared to other telecom players in india, industry dynamics, ability to monetize its existing assets, strong and stable financial position and long term prospects. The reports have also highlighted RailTel’s execution of projects of national importance, highest net profit margin of 13% achieved in FY 2020 owing to a zero debt during the period, 30% operating profit margin in FY 2020 and an overall strong track record of financial performances periodically.


RailTel offers a diversified portfolio of ICT services and solutions including MPLS-VPN, leased lines services, TPaaS, e-Office services and data center services, large network hardware system integration, software and digital services to enterprises, public sector banks, defense organisations and educational institutions; operated through data centers located in Gurugram, Haryana, Secunderabad and Telangana to host and collocate critical applications for customers including the Indian Railways.

ICICI Securities Limited, IDBI Capital Markets & Securities Limited and SBI Capital Markets Limited are appointed as the BRLMs to the Offer.


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