The IPO of RailTel Corporation of India opens for subscription today and the state-run company has fixed a price band of Rs.93-94 a share.
Incorporated in 2000, it is a Mini Ratna (Category-I) Central Public Sector Enterprise, wholly-owned by the Government of India.
However, RailTel IPO will close on February 18.
The lot size in RailTel IPO is 155 and at the upper price band of Rs.94, the application money will be Rs.14,570
The share allocation in RailTel IPO is likely to be finalised on February 23 and listing may happen on February 26 according to brokerages.
Merchant bankers to the issue are ICICI Securities, IDBI Capital, SBI Capital Markets
The government plans to raise Rs.819 crore and sell 87.15 million shares, or a 27.16% stake in this issue.
Half of the issue is reserved for qualified institutional buyers, 35% for retail investors, 15% for non-institutional bidders.
KFin Technologies Private Limited is the registrar of RailTel IPO and will manage share allocation and refund.
The company had reported a net profit of Rs.141 crore as compared to Rs.135 crore in the previous fiscal, for the year ending March 2020.
The risk includes unfavourable government policies and regulations, lower spending from governments and competition from private operators.
RailTel has reported a stable financial performance over FY18-20 with a 7.5% CAGR rise in top-line to Rs.1,128 crore in FY20.
Moreover, the company’s optical fiber network covers 59,098 route kilometers and covers 5,929 railway stations across towns and cities in India.
Further, RailTel has significant opportunities in terms of the Indian Railways ambitious plans.
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