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Railtel Corporation of India Ltd IPO

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RailTel Corporation of India is a public sector business unit, wholly owned by the Government of India (GOI) and administrated by the Ministry of Railways is coming up with initial Public Offering on February 16. The issue will be open until February 18 at a fresh issue of shares aggregating up to ₹819.24 Cr.

Offer Details:
The total issue size is ₹819cr entirely made up of an Offer for sale of ~8.72cr shares. The company will not receive any proceeds from the Offer.

Railtel corporation of India Ltd Promoter Holding

% Share holding

Pre-offer

Post-offer

Promoter Group

100.0

73.0

Public

-

27.0

Total

100%

100%

Railtel Corporation of India Ltd IPO Subscription Details

Company

Railtel Corporation of India Ltd

Issue Type

Book Building

Issue Size (In ` Crore)

₹819.24

Lot Size

155 equity shares

Open Date

16 Jan 2021

Close Date

18 Jan 2021

Offer Price

₹93 to ₹94 per equity share

DRHP

Click here

Subscription Status

Category Subscription Status Shares Offered
Qualified Institutional 65.14 Times 17,369,237
Non Institutional 73.25 Times 12,998,006
Retail Individual 16.78 Times 30,328,680
Employee 3.35 Times 500,000
Others - -
Total 42.39 Times 61,195,923

Railtel IPO Subscription Details (Day by Day)

Date QIB NII Retail Employee Total
Feb-16-2021 5:00 0.00x 0.75x 4.99x 0.81x 2.64x
Feb-17-2021 5:00 2.96x 2.63x 10.55x 1.85x 6.64x
Feb-18-2021 5.00 65.14x 73.25x 16.78x 3.35x 42.39x

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About Railtel Corporation of India Ltd IPO

Railtel Corporation of India is an information and communications technology (ICT) infrastructure provider and one of the largest neutral telecom infrastructure providers in India (Source: CRISIL Report). The company is Mini Ratna (Category-I) Central Public Sector Enterprise, wholly-owned by the GoI and under the administrative control of the Ministry of Railways. It was incorporated on September 26, 2000 with the aim of modernizing the existing telecom system for train control, operation and safety and to generate additional revenues by creating nationwide broadband and multimedia network by laying optical fiber cable by using the right of way along railway tracks.

As of January 31, 2021, it had exclusive right of way along 67,415 route kilometers connecting 7,321 railway stations for laying optical fiber cable. Its optical fiber network covers 59,098 route kilometers and also covers 5,929 railway stations across towns and cities in India. It also operates data center in Gurugram, Haryana and Secunderabad, Telangana to host and collocate critical applications for customers including the Indian Railways. Railtel also undertakes various ICT projects for the Indian Railways, central government and state governments, including various train control system projects for Indian Railways.

It provides a diverse range of services across industries and its portfolio of services can be broadly classified as:

Telecom

  • National Long Distance (NLD) services which is mainly bandwidth leasing & VPN services to its enterprise customers like Government departments and customers, MNCs, Telecom operators and MSOs.

  • Internet Service Provider (ISP) Services where it provides nationwide internet & broadband services to ISPs, Educational Institutions and various Government departments. It also offers retail broadband services through the RailWire platform.

  • Passive Infrastructure (IP-1) Services which can be classified as leasing of tower (to wireless communication providers) and dark fiber.

  • Managed Data Center and Hosting Services which covers IaaS, Colocation Services, Managed services, Cloud Computing, Managed e-Office, videoconferencing service (TPaaS) and Security Operations Centre as a Services. 
Projects (System Integration Services)

  • ICT Hardware, Software and Service System Integration Projects which covers ICT hardware implementation, software delivery and digital transformation projects including creation of state wide area network and its maintenance, data center and facility management services, Wi-Fi projects, city surveillance projects, laying of state wide fiber optic network and its maintenance, implementation and maintenance of end-to-end IT applications of enterprises.

  • Digital Services where it collaborates with partners who offer solutions/ applications that are hosted on its data centers
  • Other Services include consultancy services for ICT services and solutions and signaling services including signal design and design automation software tools for the Indian Railways.

As per the management, the Government client account for 60-65% of the revenue and the private sector, which also includes fortune 500 companies account for 35-40% of the revenues.


Railtel Corporation of India - Financials

Consolidated

FY 18

FY 19

FY 20

H1 FY21 E*

Revenue (₹Cr)

977

1,003

1,128

537

EBITDA %

27.0

30.1

29.6

24.2

Reported EPS (₹)

4.2

4.2

4.4

1.4

P/E (x)

22.5

22.3

21.4

--

P/BV (x)

2.5

2.3

2.2

--

EV/EBITDA (x)

9.5

8.7

8.3

--

ROE (%)

24.0

10.7

13.2

--

Key Points

Strong standing places well for future growth:
 Railtel having strong backing from Government of India (GoI) stands to gain from securing projects from GoI and PSUs on nomination basis. It has right of way for laying optical fiber cable along railway tracks which will expand its network in tandem with new rail line constructions. Apart from bandwidth and ISP related services, the company also provides Telecom Infrastructure Services, Managed Data Center & Hosting Services and undertakes various consultancy and system integration related projects which diversifies revenue streams. We believe that GoI programmes to increase rural broadband connectivity can aid Railtel in maintaining revenue growth momentum.

Strong order book position & balance sheet:
 As per the management, the value of orders that it is currently working on is ~₹4,000 cr which provides good growth visibility. Railtel is debt free, benefits from viability gap funding, has favourable working capital requirements and generates good cash flows which augur well for future investments. 

Key Risk:
The telecommunications industry in India is highly regulated and changes in laws, regulations or governmental policy could potentially adversely affect its business, prospects, financial condition, cash flows and results of operations.

Railtel is dependent on and derives a substantial portion of its revenue from PSU customers, the Indian Railways and other GoI entities as well as State Governments and Railtel’s relationship with GoI entities and State Governments exposes it to risks inherent in doing business with them, which may adversely affect Railtel’s business, results of operations and financial condition

How to apply IPO on 5paisa app?

  • Login to your 5paisa Mobile Trading App and select Railtel IPO in the current IPOs section
  • Enter the number of lots and price at which you wish to apply for
  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange
  • You will receive a notification to block funds in your UPI app
  • Approve the block request

Railtel Corporation of India Ltd IPO Frequently Asked Questions

RailTel Corporation of India, a public sector business unit is coming up with initial Public Offering on February 16 with the public issue comprising a fresh issue size of ₹819.24 Cr.
The company is wholly owned by the Government of India (GOI) and administrated by the Ministry of Railways.

You can apply for the Railtel IPO using any supported UPI apps. To Apply on 5paisa App follow the procedure mentioned above. For further details Click Here.

Railtel IPO will open on February 16,2021.

The Issue Size of RailTel IPO is 87,153,369 Equity Shares of face value ₹10 aggregating ₹819.24 Cr.

Railtel IPO Lot size is 155 equity shares, that means you can apply for one lot consisting 155 equity shares.

Shares of Railtel will be getting allotted on 23rd February,2021.

Railtel Shares will be getting listed on 26 February, 2021.

Here is the minimum investment calculation of Railtel IPO
Lot size – 155 * Issue Price ₹94 = ₹14,570
Hence the minimum investment amount required to invest in Railtel IPO is ₹14,570. As per the maximum limit that is allowed by SEBI you can apply for 13 lots.

No, one bank account one IPO application is allowed.

Cut off Price for Railtel IPO is ₹14,570


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Contact Details of Railtel Corporation of India Ltd IPO

Company Contact Information

Railtel Corporation of India Ltd IPO
6th Flr 3rd Block Shastri Park,
Delhi Technology Park,
New Delhi, New Delhi 110053.

Phone: 91-011-22185933-34
Email: jsmarwah@railtelindia.com
Website: http://www.railtelindia.com/

Railtel Corporation of India Ltd IPO Register

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Railtel Corporation of India Ltd IPO Lead Manager(s)

  • ICICI Securities Ltd
  • IDBI Capital Markets & Securities Ltd
  • SBI Capital Markets Ltd

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