Rama Telecom IPO Listing: Trades Flat After 6% Premium Debut on NSE SME

The telecom infrastructure specialist, Rama Telecom Limited, made a tepid debut on the NSE SME platform on July 2, 2025. After closing its IPO bidding between June 25 - June 27, 2025, the company commenced trading with a modest 6% premium before erasing most gains to trade flat near issue price, reflecting cautious market sentiment towards the telecom infrastructure sector. This book-building IPO raised ₹25.13 crore with a weak subscription of 1.61 times, indicating restrained investor interest as concerns over sustainability of recent margin improvements and competitive market dynamics overshadowed the company's established client relationships and optical fibre expertise.

Rama Telecom Listing Details

Rama Telecom Limited launched its IPO at ₹68 per share with minimum investment of 2,000 shares costing ₹1,36,000. The IPO received poor response with subscription of 1.61 times - retail at 1.82 times, NII at 1.66 times, and QIB at minimal 1.00 times, demonstrating weak investor enthusiasm across categories. The share price opened at ₹72 on NSE SME delivering 6% premium, peaked at ₹75 but subsequently declined to ₹68.40, erasing most listing gains.

Listing Price: The Rama Telecom share price opened at ₹72 on NSE SME on July 2, 2025, representing a 6% premium from issue price of ₹68, before declining to ₹68.40 as early gains evaporated.

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First-Day Trading Performance Outlook

Rama Telecom experienced modest debut performance with initial premium followed by decline to near issue price, aligning with grey market expectations of ₹73. The company, established in 2004, specialises in optical fibre laying and telecom infrastructure development, serving clients including Indian Railways, Airtel, IOCL, and Airport Authority of India through services including horizontal directional drilling and optical fibre cable laying with 40 employees.

Growth Drivers

Growth Drivers:

• Established Client Base: Strong relationships with major clients including Indian Railways, Airtel, IOCL, and Airport Authority of India ensuring recurring business opportunities
• Specialised Expertise: Advanced capabilities in optical fibre technologies including horizontal directional drilling and OFC laying serving expanding telecom infrastructure needs
• Strategic Partnerships: Collaborations with leading OEMs including Nokia, D-Link, Tejas Networks strengthening service offerings and market positioning
• Financial Growth: Revenue growth of 13% and impressive PAT growth of 112% in FY25 demonstrating operational improvements

Utilisation of IPO Proceeds

• Working Capital: ₹14.01 crore for meeting working capital expenses to support project execution and business operations
• Capital Expenditure: ₹6.14 crore for capital expenditure requirements to enhance operational capabilities
• General Corporate Purposes: Remaining funds for strategic initiatives and operational requirements
• Issue Expenses: Allocation for IPO-related expenses and regulatory compliance

Financial Performance of Rama Telecom

Revenue: ₹42.47 crore for FY25, showing 13% growth from ₹37.48 crore in FY24, reflecting steady business expansion

Net Profit: ₹5.53 crore in FY25, demonstrating exceptional 112% growth from ₹2.61 crore in FY24, though sudden improvement questioned by market response

Financial Metrics: Moderate ROE of 10.63%, strong ROCE of 37.06%, low debt-to-equity of 0.30, healthy PAT margin of 13.24%, and EBITDA margin of 17.44%

Rama Telecom's modest listing performance reflects cautious investor sentiment towards telecom infrastructure companies despite established client relationships and recent financial improvements. The weak subscription response and early gains erosion highlight market concerns about margin sustainability and growth prospects in the competitive telecom infrastructure sector.